Ware2Go, a UPS Inc. (NYSE:UPS) company that provides on-demand warehousing and distribution center services, said Nov. 18 it has teamed with Fundera, a financial marketplace, to bundle physical distribution and financial services for small and midsize businesses.
Under the agreement, Ware2Go customers, mostly smaller merchants, will gain access to financial and consulting services available through the Fundera marketplace. In the past, these companies would need to find separate partners for distribution and financial services, the companies said. “Limited access to financial services and supply chain expertise has long constrained the growth of promising businesses,” said Adi Trivedi, a senior strategist at Ware2Go.
Ware2Go is UPS’ answer to the need of smaller businesses to access warehouse capacity on demand. Many smaller shippers encounter the same spikes in traffic as their larger brethren, but lack the need or the wherewithal to sign long-term leases for warehouse and distribution center space. Through its technology, Ware2Go identifies warehouse capacity that is close to merchants’ end customers, researches and vets the warehouse operators. This allows merchants to quickly push inventory to one to two days of delivery, according to the model. The network can also scale quickly to meet a merchant’s expansion coverage, Ware2Go said.
With broader access to capital through Fundera, a business can quickly grow from one to multiple warehouse locations and stock each location with enough goods to avoid stockouts and delivery delays, the company said. Fundera has about 30 lenders in its marketplace.
The agreement is the latest step in a multi-year effort by UPS, as well as its delivery competitors, to court the coveted small to mid-size customer segment of supply chain management. Small businesses typically lack the resources to develop these types of programs in-house. Delivery firms see a tremendous opportunity for profitable revenue because smaller businesses do not have the volumes to command price discounts, and are willing to pay a premium to third parties to perform value-added work that is not a core competency for them.