Business Model Analysis of Smart City Logistics Solutions Using the Business Model Canvas: The Case of an On-Demand Warehousing E-Marketplace
Abstract
:1. Introduction
2. Materials and Methods
3. Results
3.1. Research Background
3.1.1. City Logistics and Rise of E-Commerce
3.1.2. Sharing Economy and the Rise of On-Demand Digital Platforms
3.1.3. Sharing Economy Business Models
3.1.4. The Case of the First Virtual Freight Center (VFC)
3.2. Viable Business Model for an On-Demand Warehousing Marketplace
Business Model Strategy
- Threat of new inputs: VFC will operate in a free market in which any competitor could enter, either a domestic or international. For this reason, VFC will follow an expansive pricing policy and a dynamic and extensive marketing plan in order to establish the brand name of VFC.
- Customer bargaining power: Considering as customers those looking for storage places, those offering their excess capacities and those who will use VFC in order to enhance their visibility on the market, it is expected that each customer will represent a small share of the total market and therefore will not have great bargaining power. Exceptions may occur from large commercial or 3PL companies that could use VFC regularly for large spaces, as well as large warehouse owners that offer large available space for rent.
- Bargaining power of suppliers: VFC offers its services through an online platform and is not a commercial company. From that perspective, VFC does not have suppliers in the traditional way. Its suppliers are the owners of storage spaces that have spaces for rent who are at the same time its customers, and therefore their possible bargaining power is described in the previous paragraph.
- Threat of substitute services: Substitute services already exist in the form of real estate services as well as other online general real estate search platforms for rent or purchase. However, these solutions are considered insufficient to effectively meet the demand, while the VFC also aims to increase the size of the warehouse rental market. It is estimated that the complete package of services it will offer will allow it to capture a significant market share held by substitute services today.
- Competition between existing companies: The analysis showed that there is not direct competition, since VFC will be the first on-demand platform specializing in finding warehousing spaces and relevant services. However, there is indirect competition from companies that provide similar services and companies that currently operate abroad. The indirect competition will be addressed by continuous investment in innovative services and the provision of high-quality and value-added services that will create and expand the current competitive advantage of the VFC.
- proper functioning, which will establish confidence and trust between the parties in the provision of sensitive data;
- continuous development, which will give the opportunity to sign dynamic contracts and complete the transaction through the VFC platform;
- a proper promotion plan that will lead to an increase in users.
3.3. Viability Analysis and Revenue Model
- Administrative expenses: salaries of executives and administrative staff;
- Direct labor costs: salaries of developers and other employees;
- Marketing expenses: expenses for the implementation of the commercialization and promotion plan;
- Office space rental costs;
- Outsourcing costs: costs for services outsourced by the VFC, such as lawyers and accountants;
- Other expenses: expenses for hosting the software, maintaining the backup in a cloud environment, the maintenance of the server and the consumables;
- Depreciation: Refers to the costs of depreciating equipment.
3.4. Development of Business Model Canvas
4. Discussion
5. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Data Availability Statement
Conflicts of Interest
References
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Strengths | Weaknesses |
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Opportunities | Threats |
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Market | Size | Explanation |
---|---|---|
3PL market @ 2018 (ICAP) | 380.16 € | Market size 2018 according to ICAP sector study |
Total 3PL market @ 2020 (est.) | 418.90 € | Estimation + 10.2% for 2020, based on ELSTAT |
Warehousing revenues | 249.25 € | Estimation of share 59.5% of the total market for warehousing services |
3PL storage market revenues (year 1) | +85.99 € | Estimation of share 34.5% of the total market of warehousing for storage services like VFC |
New outsourcing market (year 1) | +4.30 € | Estimation of additional market from rise of outsourcing at storage services |
Total target market | =90.29 € | The estimated total market of logistics services at the start of operation of the VFC platform in 2022 |
(€ ‘000) | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 |
---|---|---|---|---|---|---|
Total Revenues | ||||||
Sellers commission revenues | 0.0 | 1.2 | 2.6 | 4.3 | 6.7 | 7.0 |
Buyers commission revenues | 0.0 | 13.4 | 43.2 | 67.9 | 96.0 | 100.6 |
Transactions fees | 88.1 | 221.4 | 377.4 | 543.2 | 698.1 | 785.4 |
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | |
88.1 | 236.1 | 423.2 | 615.5 | 800.8 | 892.9 | |
Operating costs | ||||||
Direct Labour | 68.3 | 86.6 | 88.3 | 90.1 | 92.3 | 94.6 |
Rent | 12.0 | 12.1 | 12.2 | 12.4 | 12.6 | 12.9 |
Other | 19.0 | 19.6 | 22.2 | 24.0 | 26.4 | 28.4 |
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | |
99.3 | 118.2 | 122.8 | 126.5 | 131.4 | 135.9 | |
Gross profit (€ ‘000) | (11.2) | 117.8 | 300.4 | 489.0 | 669.5 | 757.0 |
Overheads | (191.5) | (202.1) | (197.8) | (199.3) | (201.6) | (204.5) |
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | |
EBITDA | (202.7) | (84.3) | 102.6 | 289.7 | 467.8 | 552.5 |
Depreciation | (3.6) | (4.1) | (4.1) | (4.1) | (4.1) | (4.1) |
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | |
EBIT | (206.3) | (88.4) | 98.5 | 285.6 | 463.7 | 548.4 |
Interest Loan | (10.50) | (12.02) | (15.20) | (13.70) | (10.30) | (5.15) |
Loan commitment fees | (0.65) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Interest income | 1.22 | 0.05 | 0.09 | 0.96 | 3.10 | 6.48 |
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | |
EBT | (216.2) | (100.4) | 83.4 | 272.8 | 456.5 | 549.7 |
Key Partners | Key Activities | Value Propositions | Customer Relationships | Customer Segments |
---|---|---|---|---|
Customer reward programs; | ||||
Logistics and warehousing market consultants; | Registration and mapping of available storage spaces; | Quick and easy finding of suitable storage facilities; | All types and sizes of companies looking or searching for warehouse spaces, with an emphasis on e-commerce businesses; | |
24 h telephone service; | ||||
Research institutions specializing in logistics; | Supply and demand matching; | Dynamic database of available storage spaces and logistics services in Greece; | Companies with excess storage capacities; | |
Workshops for the familiarization with the VFC platform; | ||||
Marketing & advertising consultants; | Collection and analysis of market data; | Providing a tool to support the design and management of a business storage network; | Warehouse owners; | |
Ability to provide personal training on the services of the VFC; | ||||
Technology providers. | Dynamic Contracts support; | Providing the possibility of smart and fair pricing of storage spaces, satisfying all involved (fair pricing); | Warehouse equipment supply companies; | |
Platform maintenance. | Improving the visibility of the warehousing market, the available storage spaces and their characteristics in Greece. | Warehouse consulting companies; | ||
Key Resources | Channels | Non-logistics market. | ||
Excellent knowledge of the warehousing market; | Website; | |||
Fair pricing and intelligent matching algorithm; | Advertising in means of the logistics sector; | |||
Social networks; | ||||
Design and support of the platform; | ||||
Communication sponsors in logistics conferences; | ||||
Shared capacity model -community. | ||||
Direct presentations to companies (e.g., Power breakfast). | ||||
Cost structure | Revenue streams | |||
Employee salaries; | Transaction fees; | |||
Cost/depreciation of technological equipment; | Subscription fees; | |||
Website/Software/Hardware: update/upgrade/maintenance; | Revenue from lease agreements; | |||
Advertising/promotion costs. | Market analysis reports; | |||
Third party advertising. |
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Share and Cite
Parodos, L.; Tsolakis, O.; Tsoukos, G.; Xenou, E.; Ayfantopoulou, G. Business Model Analysis of Smart City Logistics Solutions Using the Business Model Canvas: The Case of an On-Demand Warehousing E-Marketplace. Future Transp. 2022, 2, 467-481. https://doi.org/10.3390/futuretransp2020026
Parodos L, Tsolakis O, Tsoukos G, Xenou E, Ayfantopoulou G. Business Model Analysis of Smart City Logistics Solutions Using the Business Model Canvas: The Case of an On-Demand Warehousing E-Marketplace. Future Transportation. 2022; 2(2):467-481. https://doi.org/10.3390/futuretransp2020026
Chicago/Turabian StyleParodos, Leonidas, Orestis Tsolakis, George Tsoukos, Elpida Xenou, and Georgia Ayfantopoulou. 2022. "Business Model Analysis of Smart City Logistics Solutions Using the Business Model Canvas: The Case of an On-Demand Warehousing E-Marketplace" Future Transportation 2, no. 2: 467-481. https://doi.org/10.3390/futuretransp2020026