If you live in New York and order a pair of shoes from a sustainable startup called Thousand Fell with same-day delivery, the shoes might arrive via bicycle. The startup is one of several new brands to use Ohi, a new delivery service that helps startups compete with Amazon by offering ultra-fast, low-emissions delivery.
“The problem that we’re solving for is that consumer expectations for e-commerce are getting faster and faster, driven primarily by Amazon, but also now by Walmart, by Target, and by all these other big brands enabling same-day delivery,” says Ben Jones, Ohi’s CEO. “For smaller brands, it’s almost impossible for them to do that at low cost.”
Ohi creates what it calls “micro-warehouses” in unused retail space or offices in cities—beginning with New York City and Los Angeles—and then uses analytics software to help brands predict demand, so each warehouse can be stocked well in advance. The system means that brands can avoid the much higher environmental cost of next-day or two-day shipping on a plane.
Jones wants to help replace the standard distribution system that relies on larger warehouses and longer distances. “If we’re going to build a replacement that will last for the next 60 years, we have to have sustainability as one of our core values,” he says. “By getting inventory into cities, we are avoiding the need to take traditional delivery trucks to do routes dropping off parcels. We’re using Postmates and other last-mile carriers that primarily have people on bikes or on foot to deliver the parcels instead.” In L.A., couriers make deliveries with electric vehicles.
The system can also reduce packaging. “When you’re not throwing parcels around between various trucks in between the different distribution centers, you eliminate the need for a cardboard box,” he says. The majority of Ohi customers receive their order in recyclable paper bags, which Jones says reduces the amount of packaging waste by more than 75%.
While some of the brands using the platform choose it because of its sustainability ethos, others just want a way to reach customers quickly and cheaply—and as startups, they wouldn’t be able to have multiple warehouses in different cities on their own. In the new system, they might have as little as a single pallet of products in each location, but the combination of multiple brands together has enough “demand density” to make it economical. Ohi now plans to expand to other large cities. “Our vision is that this is the future of fulfillment, the future of warehousing,” says Jones, “and we’re going to replace a lot of the existing warehouses that work with our partners.”