Cost sharing is an incredibly powerful tool for startups and entrepreneurs, but many likely either don’t consider it or aren’t sure it would be a feasible solution for their business.
You might be surprised to learn there are service providers that consumers use every day that benefit from cost sharing.
Wireless service providers, for example, often rent space or share privately owned towers with competing providers. Nearly every retail store or restaurant benefits from third-party logistics companies that essentially let clients share their distribution costs.
There are multiples benefits enjoyed by members of co-manufacturing communities. They may find themselves working alongside a potential customer or vendor. They might network with other members that introduce them to new potential clients they otherwise wouldn’t have found. They might discover ideas or ways of doing things that help them work better, faster or at a lower cost per unit.
Maybe the most reliable, sure-fire benefit of co-manufacturing is cost sharing. While cost sharing may not always have a direct impact on landing more clients, it does allow startups and small manufacturing businesses to invest more in finding new clients.
How Shared Manufacturing and Shipping Operations Reduce Costs
If you’re worried about cash flow and whether it will hold your small business back, you’re not alone. A global Intuit survey from 2019 found:
- 61 percent of small businesses struggle with cash flow
- 32 percent aren’t able to completely pay vendors, pending loans, their employees or themselves
- 69 percent of small business owners lose sleep over their cash flow
Any tools that enable small business owners to reduce their operating costs, without jeopardizing their production capacity or the quality of their products and services, are generally welcome. Operating costs in light manufacturing and warehousing often come down to things like expensive commercial and industrial real estate, utility and energy use, material resources and labor.
Some manufacturing startup costs, like equipment and tools, are often unavoidable. But others, like utilities, industrial warehousing, offices, shipping facilities and light manufacturing space can be shared with other businesses.
The ability to defray these costs can allow some small businesses and startups to compete for contracts against larger companies. Depending on a small business’s industry, their capacity may impact the types of clients they can handle. Shared workspaces may enable small industrial businesses to quickly adjust and leverage limited resources more wisely than a less agile producer in their vertical.
The Success of Third-Party Logistics Providers
Sharing space, distribution and fulfillment services isn’t a new concept in manufacturing and industrial contexts. Manufacturing and retail interest have long understood the potential waste that can result when every business is determined to go it alone.
Products delivered to Walmart, Target or any grocery store aren’t all arriving in manufacturer-specific trucks. Manufacturers make products, which are sometimes warehoused in privately owned or shared public warehouse space. Those products are then shipped to retail distribution centers along with all types of other products from a variety of manufacturers. Goods from many different manufacturers are loaded onto the same trucks at distribution centers and sent to stores.
This system where manufacturers and retail outlets share warehousing, distribution and other logistics costs makes a lot more sense than each individual manufacturer delivering a small quantity of goods to thousands of stores across the country.
Shared manufacturing space at MAC6 functions on a similar principal. Small businesses in the Tempe area that require light manufacturing or warehouse space can avoid incurring steep property or commercial lease costs as well as a lot of utility and facility expenses by joining a shared workspace community.
Businesses that use MAC6’s warehousing and light manufacturing facilities can have access to 1,000 to 5,000 square feet of light co-manufacturing and warehousing space for as little as $1.50 per square foot per month. Members can easily adjust their space allotment quickly based on the changing needs of their business.
In addition to space in the warehouse, MAC6 co-manufacturing members also gain access to:
- Shared offices and meeting rooms
- Truck bays, loading docks and shipping facilities
- Shared clean room facilities
- Power, compressed air and natural gas
You can book a tour to learn more about MAC6’s shared manufacturing, warehousing and shipping facilities, or call us at (480) 582-2200.