The sharing economy is prompting a rethink of business practice. To address confusion, this transformative model is also referred to as the ‘crowd’, ‘gig’, ‘peer-to-peer’ or ‘on-demand’ economy. It operates within the context of digital technology and is based on collaborative consumption, allowing both individuals and businesses to share assets, products or services with one another.
At its core, the sharing economy rests on the principle that people can utilise their possessions, abilities and time to benefit others while simultaneously earning an income for themselves. This approach allows for goods and services to be used without the user actually owning them outright, providing a more cost-effective and often environmentally friendly alternative.
Some of the world’s largest brands have successfully adopted this model. Uber, for instance, operates as the world’s largest taxi company without owning any cars, while Airbnb, the world’s biggest accommodation provider, operates no properties.
The UK’s sharing economy is projected to be worth £140 billion by 2025 with growth primarily driven by consumer-facing brands. B2B sectors have not yet fully embraced the principles of resource sharing, despite the many advantages it offers to companies operating in these fields.
Applying a sharing economy approach requires businesses to identify opportunities or gaps in their market and act boldly. It takes confidence and can lead to positive disruption in established industries.
Share in the benefits of a shared economy
While this model is best known for its application in business-to-consumer challenges, what lessons can be applied to the world of business-to-business?
Greater value
The concept that companies can come together to share assets is inherently cost-effective, creating and amplifying value in multiple ways. For example, instead of getting tied into an expensive and lengthy office building lease, a business can reduce its costs by renting a desk within a co-working space. Desks can be flexibly added and subtracted according to demand.
Not only does the sharing economy present obvious cost savings, but it can also create significant revenue opportunities. For example, warehouse owners with unused space can sell it to logistics providers looking for storage capacity or a strategic location.
More sustainable
In a similar vein, optimising space utilisation lowers energy consumption and reduces the need for new builds. The impact of construction is significant on the environment in terms of carbon footprint and green land irrevocably lost.
Broaden reach and scope
The sharing economy approach opens new and innovative ways of thinking, which may otherwise have not presented themselves. Collaborative working offers greater diversity, global perspective and inspiration to learn from. This is especially the case for companies engaging contractors and freelancers to complete work rather than adding to the workforce with permanent staff members.
Boost agility and flexibility
Opening access to resources and expertise through the medium of technology, liberates business leaders to ideate and focus on their product in the knowledge that sufficient capacity is available without the fixed cost and return-on-investment penalties of capital-intensive models.
How fulfilmentcrowd applies these principles to logistics
The traditional approach to logistics has often been coined ‘four walls’ where a provider acquires warehouse space (purchased or leased building) and resources to satisfy demand which is uncertain or, at best, difficult to forecast. The result is underutilisation or limited capacity for growth; the profitability envelope in which a warehouse could be considered operating in optimum conditions is impossibly narrow.
The sharing economy model has enabled tech business like fulfilmentcrowd to rethink the four walls problem by accessing free space in warehouses and enabling customers to see their inventory levels through an app. Site operators generate income from their space, customers can scale-up on a completely variable cost base and fulfilmentcrowd can, uniquely, always offer capacity, a point proven during the pandemic when demand skyrocketed.
As omnichannel brands seek ways to grow revenue, export rates are rising and this is driving demand for B2B and B2C distribution in foreign markets. fulfilmentcrowd offers these customers access to a network of modern logistics hubs in key overseas locations through a single software platform and global relationship manager supported by local expertise and parcel carriers who understand conditions on the ground.
Conclusion
The B2B sharing economy is developing at pace and an increasing range of services are becoming available. Collaboration underpinned by tech and common standards is a key point of differentiation, especially for those operating in more traditional markets. As these principles continue to mature and more businesses digitalise their operations, the model will continue to gain momentum.