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Business Model Analysis of Smart City Logistics Solutions Using the Business Model Canvas: The Case of an On-Demand Warehousing E-Marketplace

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The rapid rise of e-commerce and advances in the technological sector have enabled the emergence of modern business models on e-marketplaces. Digital and on-demand e-marketplaces have become increasingly popular, responding to the trend of the sharing economy in various business sectors, but there is little guidance on how to develop the respective business models in order to ensure the long-term sustainability of such companies. The present paper is based upon the development and operation of an innovative on-demand warehousing e-marketplace in Greece as a one stop-shop for on-demand warehousing services. The purpose of this paper is to identify the necessary components for developing a successful innovative business model for a viable and effective on-demand warehousing platform. The identification of the value proposition of the proposed e-marketplace, the necessary business infrastructure and the customer interface are described, analyzed and adapted to the Greek Market. Furthermore, this paper also describes the cost structure and the revenue streams of the proposed on-demand warehousing e-marketplace.
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Citation: 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,
Academic Editor: Laura Eboli
Received: 9 March 2022
Accepted: 17 May 2022
Published: 19 May 2022
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Business Model Analysis of Smart City Logistics Solutions
Using the Business Model Canvas: The Case of an On-Demand
Warehousing E-Marketplace
Leonidas Parodos 1, * , Orestis Tsolakis 1, George Tsoukos 2, Elpida Xenou 1and Georgia Ayfantopoulou 1
1Centre for Research and Technology Hellas, Hellenic Institute of Transport, 57001 Thessaloniki, Greece; (O.T.); (E.X.); (G.A.)
New Technologies and Innovation Department, TREDIT S.A., 55135 Thessaloniki, Greece;
*Correspondence:; Tel.: +30-23-1049-8464
The rapid rise of e-commerce and advances in the technological sector have enabled the
emergence of modern business models on e-marketplaces. Digital and on-demand e-marketplaces
have become increasingly popular, responding to the trend of the sharing economy in various
business sectors, but there is little guidance on how to develop the respective business models
in order to ensure the long-term sustainability of such companies. The present paper is based
upon the development and operation of an innovative on-demand warehousing e-marketplace in
Greece as a one stop-shop for on-demand warehousing services. The purpose of this paper is to
identify the necessary components for developing a successful innovative business model for a
viable and effective on-demand warehousing platform. The identification of the value proposition
of the proposed e-marketplace, the necessary business infrastructure and the customer interface are
described, analyzed and adapted to the Greek Market. Furthermore, this paper also describes the
cost structure and the revenue streams of the proposed on-demand warehousing e-marketplace.
business model canvas; e-marketplace; innovation; on-demand warehousing; sustainable
business models
1. Introduction
Rapid improvements in the technology sector have enabled the emergence of in-
novative business models based on digital platforms [
]. Digital platforms extensively
transform business models and inter-company and customer relationships in Industry
4.0 contexts [
]. In addition, [
] identified three predominant types of digital platform
orientation regarding the main business models and platform motivations, while [
] an-
alyzed and compared innovative business models from multiple case studies, showing
key differences and similarities. Popular e-marketplaces such as AirBnB or Uber can now
connect previously unmatched demand and supply side users through novel forms of
value creation, delivery and capture. Moreover, the continuous increase in e-commerce,
in combination with urbanization in bigger cities, has created a need to constantly evolve
companies’ business models in order to find smart and viable solutions to survive in a
rapidly changing and highly competitive business environment. The trend of e-commerce
over recent years has also contributed to changing the traditional way of doing business
and has allowed a remarkable rise in the sharing economy, which is subsequently expressed
through on-demand digital platforms. Moreover, the ever-increasing importance of busi-
ness responsiveness to adapt to customer requirements has created the need for on-demand
services in several business sectors, including logistics and warehousing. Furthermore, the
rising need for finding flexible storage services, as well as developing synergies across the
supply-chain through an easy-to-use online platform, has led warehousing companies to
develop on-demand services to better satisfy their customers’ requirements. Regarding
Future Transp. 2022,2, 467–481.
Future Transp. 2022,2468
the Greek Market, little is known about the physical retail warehouse market. A lack of
visibility regarding the available warehousing spaces across the country and their technical
and quality characteristics is noticed, thus making the process of finding suitable storage
space for the logistics actors very time consuming and costly, preventing the design and
development of on-demand warehousing services. In addition, the sharing economy and
on-demand platforms have just started to gain interest in most business sectors, including
warehousing. To date, however, there is a lack of understanding about the distinctive
business models that could be applied in such on-demand digital platforms. The purpose
of this paper is to present a viable business model for the first on-demand warehousing
platform in Greece, the Virtual Freight Center (VFC), by using the business model canvas
approach tailored to digital platforms. The next chapter presents an extended literature
review about city logistics and the rise of e-commerce, in addition to the emergence of
the sharing economy and the respective business models used so far. Additional insights
including the impact of the COVID-19 pandemic on the sharing economy, and an analysis
of consumer behavior in optimizing last mile deliveries is also highlighted. The following
chapter focuses on the case of VFC, describing the on-demand warehousing platform and
its business model developed using the business model canvas as the most appropriate tool.
Summarizing the information in the present paper, the proposed business model
of the company is described by using the business model canvas tailored to digital plat-
forms as the most appropriate strategic tool. Through this approach, the visualization
of the necessary elements of the company’s’ strategic management in order to develop a
successful business plan for an on-demand warehousing e-marketplace is achieved. The
results provide guidance to innovative companies that want to embrace principles of the
on-demand economy.
2. Materials and Methods
The present research consists of four (4) distinctive methodological steps. At first, an
extended literature review for mapping the existing logistics and warehousing facilities
was conducted, mainly focused on the industrial centers of Thriasio and Sindos. After
the completion of the literature review, a dedicated focus group was organized with the
participation of fifteen (15) logistics experts from various logistics and supply chain actors
in order to discuss the current warehousing conditions in the Greek market and their
willingness to adopt on-demand logistics solutions in their daily operations. The logistics
experts were selected on the basis that they could potentially be platform users from both
sides of the market, i.e., from the demand as well as the supply side.
In order to validate and improve the results of the focus group, the next step was a
questionnaire survey targeted at Greek logistics and supply chain actors. In total, 90 logisti-
cians from 69 dominating companies participated in the survey. The survey was conducted
in a targeted logistics and supply chain conference in order to collect representative data
from the participating companies. Again, the conference for the survey was selected due
to the large number of companies that could use the platform, either by offering storage
space (supply side) or by requesting warehousing facilities (demand side) for short-term or
long-term warehousing. The final step of the present methodology was a comprehensive
analysis and mapping of the Greek warehousing market.
3. Results
3.1. Research Background
3.1.1. City Logistics and Rise of E-Commerce
Globalization is a term that characterizes our era. According to the UN, until 2050,
approximately the 70% of world population is estimated to live in urban areas [
]. The rise
of the population in metropolitan areas leads to the expansion of urban areas, enhancing
cities’ complexity. This trend pushes logistics operators to redesign the framework under
which they operate and find more efficient and sustainable ways of providing logistics
services in urban areas.
Future Transp. 2022,2469
As mentioned in the literature, the purpose of city logistics is the identification of
the proper process for transporting goods within a city [
]. Given the tendency for over-
crowded urban areas, city logistics and their efficiency play a key role in the lives of
more and more people [
]. Even though it isn’t perceived at first, city logistics affects
cities prosperity [
] in terms of economic advancement, social cohesion and environmental
sustainability [9].
In addition to the increased complexity in city networks, technological advancements
such as e-commerce has dramatically altered the retail sector in the past two decades. [
From 2014 until 2019, the e-commerce sales ratio has been tripled globally, while, until
2023, e-commerce is estimated to represent 20% of the global retail share. This evolution is
based on multiple factors, among which the large diffusion of personal computing devices
and technological advancements are the major ones [
]. Finally, it has to be mentioned
that COVID-19 acts as driver for the rapid development of the e-commerce, increasing
electronic transactions and seamless payments and stressing supply chains [
]. In the
EU-27, retail sales via mail order houses or the Internet in April 2020 increased by 30%
compared to April 2019, while total retail sales diminished by 17.9% [11].
The sharp rise in e-commerce has created many opportunities for businesses, removing
spatial constraints, creating visibility to a wider consuming audience. However, new
challenges come in the foreground. The most common e-commerce business model is B2C
(Business-to-Consumers). The ever-growing demand for online orders in combination with
consumers’ small size orders creates a complex framework within which logistics operators
have to cope. The major operational pressures on logistics operators are commonly related
to providing reduced lead times in restricted time window deliveries and home delivery
failures due to the customer’s absence [
] while at the same time keeping prices at the
lowest level [14].
As mentioned previously, the major impact of e-commerce in city logistics systems
refers to the cost related to freight distribution systems as well as their optimization [
]. In
e-commerce, the vast majority of orders consist of small orders from multiple customers,
with the necessity that they be delivered in a restricted time window. Logistics providers
have to spend a huge amount of resources, utilize the available infrastructures and invest
in planning in order to cope with these challenges. In order to retain low-level costs and
achieve greater revenues, new distributing methods have come to the fore. Some online
retailers who own physical stores, using them as consolidation and distribution centers
in order to gain proximity to the market, minimize delivering costs and improve their
responsiveness. Additionally, the click & collect method is also utilized by those retailers
in order to avoid loss-making in last-mile deliveries as well as to gain profit from in-store
purchases [15]. In the same philosophy, on-line retailers use pick-up points such as locker
banks to reduce operational costs (home delivery failures, flexible time window), reduce
environmental impact (reduced fuel consumption and emissions) and be closer to the
end-users [
]. Finally, the CIVITAS Forum Network, in their effort to support and promote
sustainability in urban freight logistics, provide an extended list of good practices already
implemented in cities around EU. The list includes guidance for the implementation of
market-based measures, enhancing stakeholders’ engagement, policy regulations, land
use and infrastructure utilization, as well as introducing new technologies and enhancing
awareness of eco-logistics [16].
3.1.2. Sharing Economy and the Rise of On-Demand Digital Platforms
The rapid rise of e-commerce led also to a new trend, as societal interests have shifted
from the traditional ownership philosophy towards sharing goods or services by the use of
digital platforms. In this direction a great effort has been made, towards the identification
of the sharing economy philosophy. However, there is still a lot of confusion in the literature
on the exact definition of the sharing economy, with related terms such as on-demand
economy, peer-to-peer economy [17] and gig economy [18] adding to this confusion.
Future Transp. 2022,2470
Given the social shift to the sharing economy, the success recorded on sharing assets
on-demand, such as homes (AirBnB) or cars (Zipcar), through digital platforms did not go
unnoticed. These platforms are essentially marketplaces aiming to meet available supply
with the requested demand. Additionally, the rising need to provide effective services to
customers has led logistics providers to rethink three-key segments: logistics transportation,
on-demand warehousing and fulfilment.
To achieve higher levels of responsiveness, the need for businesses to retain their
inventory as close to end-customers as possible has been identified. However, the process
of finding flexible on-demand storage spaces is quite difficult due to low visibility, a lack
of high standard infrastructures or high long-term commissions. One of the advantages
of the sharing economy is the ability for enterprises to create on-demand synergies and
share cost-intensive assets such as warehouses, vehicles, information flows and workforce
through the use of digital platforms. A turn to on-demand warehousing and transport
capacities has been noticed recently as an alternative to traditional solutions, in order to
reduce fixed operating costs, achieve better assets utilization rates, be more responsive and
enhance supply chain resilience.
The sharing economy as a new economic trend has faced fundamental changes due
to the COVID-19 global pandemic. The sharing economy was growing very fast prior to
the pandemic outbreak. According to [
], the value of the sharing economy would have
been $335 billion in 2025, and this estimation was close to becoming a reality. The impact of
COVID-19 on some sectors of the sharing economy was so severe that some experts were
afraid that the pandemic could end the era of the sharing economy [
]. As most of the
population was in lockdowns for months, and the post-lockdown period was characterized
by distancing rules, the demand for specific sharing services significantly declined [
Sharing services related to hospitality and transportation faced massive challenges in order
to adapt to that new reality. Companies such as AirBnB [
], Uber, Lyft [
] and many
others suddenly had to face a massive decrease in their revenues.
However, the COVID-19 pandemic did not have a negative impact on all sharing
economy services. On the contrary, it created some significant opportunities to be exploited.
The use of online shopping and food delivery services [
] exponentially increased, thus
resulting in the rejection of the statement that the pandemic will end the sharing economy,
as the impacts of the COVID-19 related lockdowns were not the same for all sectors of the
sharing economy.
It can be seen that the sharing economy is not a homogenous market [
] despite its
widely acknowledged benefits, thus causing difficulties to companies in finding the most
suitable business model, while there is still lack of guidance on how to adapt to respective
platform business models. It is therefore extremely important to examine and identify
the framework of business models and identify the specific features that will make them
viable and add value to the companies. Regardless of the way in which a business currently
operates, either through a sharing economy platform or in a traditional way, it is essential
to understand the operational philosophy of sharing economy platforms. In this line, an
effort has been made in the framework of this paper to identify the specific characteristic
business models of the sharing economy that platforms need to take into consideration
during the development process.
3.1.3. Sharing Economy Business Models
Several approaches have been made in the literature to explore the characteristics
of the sharing economy business model. First of all, for reasons of common sense we
need to provide a definition of a business model. A compact definition is given by Teece,
who indicates that each business model has to provide a clear definition to the respective
enterprise regarding value creation, delivery and capture mechanisms employed [26].
Following this definition as base ground, Täuscher classifies business models for shar-
ing economy platforms into six categories. In addition, the strongest elements regarding
value creation, delivery and capture mechanisms are identified. Regarding value creation,
Future Transp. 2022,2471
the type of platform is the strongest differentiation element that needs to be taken into con-
sideration, while in the value capture dimension, the revenue model is the corresponding
strongest element. Finally, regarding the value delivery dimension, three elements were
identified as the strongest differentiation elements and refer to the platform participants:
the value proposition, the transaction type and the good [1].
Popular marketplaces such as Uber or AirBnB have changed forever the traditional
business models used by companies to create value and sustain competitive advantages.
The rapid development of these digital platforms has enabled the emergence of innovative
business models in order to provide new value propositions and novel revenue models.
According to [
], there are three main business model elements, and their potential specifi-
cations seem to be of high relevance in marketplaces. The proper selection of these elements
and their specifications is of vital importance for every business model and could play a
very important role in the success or otherwise of the marketplace. This paper aims to
identify a viable business model for an on-demand warehousing marketplace by following
specific dimensions and attributes that will lead to the development of the business model
canvas for the first such platform in Greece.
3.1.4. The Case of the First Virtual Freight Center (VFC)
The global financial crisis in 2009 enhanced the ideological impetus of using techno-
logical advances in building an economy that was more social, sustainable and resilient.
However, not all sectors had the ability to engage in new innovative business practices and
models. Real estate is one of the sectors affected the most, especially in the Greek market.
After a decade of economic recession and the consequent insecurity prevailed, investments
on new and high standards warehouse infrastructures were frozen.
Given the increased need for on-demand warehousing and the lack of visibility in
the market, e-marketplaces have developed added value services, apart from operating
as platforms matching supply with demand. Through their use, companies leverage from
flexible arrangements, such as a pay-as-you-go model, without committing to unnecessary
long-term agreements, while warehouse providers can utilize their unutilized storage space
and make extra profit.
It is well-know that over the last few years, e-marketplaces for on-demand warehous-
ing have become increasingly popular around the world. Companies such as Flexe provide
warehouse and fulfilment services through a network of more than 1000 warehouses all
over USA. Similarly, a company called Ware2Go provides on-demand solutions through a
nationwide network of certified warehouses enabling companies of all sizes to effectively
compete and grow. These e-marketplaces are increasingly gaining attention, with many yet
to be developed (Stockbooking, Flowspace, Stowga, a.o.); however, in the Greek market,
little attention has been paid.
In response to this, a research project under the name Warehouse Match & Optimize
(WareM&O), co-financed by the European Union and Greek national funds through the
Operational Program Competitiveness, Entrepreneurship and Innovation, has developed a
Virtual Freight Center (VFC).
The aim of the VFC is to create the first on-demand warehousing platform in Greece,
providing a comprehensive observatory of warehouses, increasing visibility in the mar-
ket and optimizing the utilization of the unused storage facilities through a single access
point. The ecosystem of the e-marketplace will constitute industrial partners and LSPs.
Through VFC, users will be enabled to participate in collaborative storage schemes, hav-
ing detailed and real-time information regarding the available storage spaces as well as
their specifications. Moreover, VFC will enhance the notion of short-term leasing, not
excluding long-term leasing solutions when requested, and the introduction of flexible and
transparent “pay-as-you-go” pricing policy will benefit both the supply and demand sides.
In order to ensure the successful implementation of the tool and achieve high pen-
etration rates in the market, it was essential to engage key actors of the market in the
development process in order to identify the maturity and adaptation levels of the on-
Future Transp. 2022,2472
demand platform concept among Greek professionals. For this reason, a survey has been
conducted, the scope of which was to identify current trends in the market and highlight
the needs of the key actors. Finally, an important aspect of the survey was to identify
the potential interest of Greek stakeholders in engaging with flexible warehouse mod-
els through the use of an innovative on-demand warehouse e-marketplace, as well as to
identify future challenges.
The survey was conducted with the participation of 90 stakeholders coming from the
Greek logistics industry from across the supply chain in October-November 2019. The
results show that regarding storage infrastructures, the great majority of participants (63%)
operate through their privately-owned warehouse and distribution system, while many of
them (41%) use a hybrid model for their operations by assigning their distribution to 3PL
logistics providers (Figure 1).
Figure 1.
Capture of the existing warehousing models in the Greek market (source: Authors’ survey).
Additionally, almost half of the participants (48%) express they are in need of short-
time warehouse solutions. Moreover, half of the participants (50%) mention that they are
in need of long-term warehousing solutions (Figure 2). Despite the fact that 44% of the
participants are currently offering space and/or warehousing services, more than half of
them mention that they face difficulties in finding appropriate storage facilities. These
results highlight the necessity of providing flexible and low-cost warehouse solutions in
the Greek market.
In order to better understand the factors setting barriers in their daily operations,
participants were called so that they could provide their feedback. As the results indicate,
the lack of visibility across the supply chain and the effective response to the increased
demand are the major challenges to face (Figure 3). However, it is quite encouraging that
the participants (79%), seem to understand the importance of investing towards the digital
transformation of the supply chain and the utilization of innovative tools to optimize
business processes.
Having a clear view of participants’ warehousing operation models and their needs,
it was essential to further explore their intention to use a VFC platform as well as their
willingness to cooperate in a sharing warehouse capacity scheme either on the supply
or the demand side. The results that were obtained are quite encouraging, as almost all
participants (78%) shared a positive attitude towards the operation of such a tool.
However, a great majority of these does not seem to feel ready to adopt this tool.
This lack of willingness is mainly due to the fact that participants fail to conceptualize the
benefits and the exact impact of implementing VFC in their daily routine [
]. Summarizing
Future Transp. 2022,2473
the survey’s results, it is understood that the Greek market, although not mature yet, shares
a positive attitude towards the development of new technological solutions that will
enhance visibility within the supply chain and provide the opportunity to improve their
operational procedures through engagement in new collaborative warehousing models.
Figure 2. Warehousing needs in the Greek market (source: Authors’ survey).
Figure 3. Current challenges in the Greek market (source: Authors’ survey).
3.2. Viable Business Model for an On-Demand Warehousing Marketplace
Business Model Strategy
The development of the first on-demand warehousing marketplace in Greece implies a
road to the unknown when the time comes to develop a business model strategy in order to
identify the significant attributes of the model and its respective specifications. Section 3.3
presents the business model of the VFC by using the Business Model Canvas approach.
In our business model, VFC is the platform through which supply and demand for
warehousing spaces will be connected. The target of the VFC is to play an important role in
warehousing sector by offering high quality services for matching supply and demand for
appropriate warehousing places in Greece. In that way, VFC will create enhanced visibility
and fairness in transactions, which will enhance the competitiveness and productivity of
Future Transp. 2022,2474
the companies operating in Greece. The vision of VFC is to become the leader of on-demand
warehousing first in the wider areas of Thessaloniki and Athens, then throughout Greece
and in future throughout the Balkan region, being the reference point for the economical and
efficient searching for and finding of professional storage spaces for all types of businesses.
In order to develop our business model, we first performed a thorough environmental
and competition analysis in order to identify the current conditions in Greece and the
business environment for the new innovative on-demand warehousing platform of VFC.
The analysis revealed that the search for rented storage space by companies is carried out
mainly through: (a) cooperation with 3PL companies that offer logistics and warehousing
services, (b) direct research and communication with the available spaces by the interested
companies, (c) cooperation with real-estate agencies and (d) international e-marketplaces
that offer their services in Greece, although these have a limited penetration into the Greek
market so far.
In relation with the above, the value proposition of the VFC is significantly different,
offering diversified services that are not offered today in the Greek market. The description
of these services is beyond the scope of this paper, but it indicates the holistic view of
the VFC platform and the efforts to develop a sustainable business model based on an
innovative on-demand platform.
Following the competition analysis, we next analyze the forces exerting pressure on
the warehousing and logistics industry and the companies operating in it according to the
Porter model of 5 forces.
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.
In addition to the previous analysis, it was decided to conduct a SWOT analysis in
order to identify and analyze the internal and external factors that affect the viability of
VFC. The results of the SWOT analysis are highlighted in Table 1.
Future Transp. 2022,2475
Table 1. SWOT analysis for VFC (source: Authors’ survey).
Strengths Weaknesses
Monitor all/significant part of the available
storage space.
Increasing the total available storage space.
3. Increase the utilization rate of existing
storage spaces.
Ensuring fair value (fair price) based on the
market trends in a given time.
5. Possibility of additional income for
commercial companies that have a surplus
of private storage space.
6. Facilitation of the entry into regional
markets of companies that do not have
local bases.
7. Transparency in transactions.
1. Lack of direct contact with the
customers of the platform, which is
important for the establishment of the
professional relationship & trust.
2. Coverage of a significant part of the
offer is required for the proper
operation of the platform algorithm.
3. Inability to complete (temporarily) the
financial transaction through the
platform, thus weakening the role of
the service.
Opportunities Threats
Expected development of the warehousing
sector in Athens & Thessaloniki due to the
existing (Athens) and expected (Thessaloniki)
development of their cargo ports.
2. Lack of strong and organized competition
as well as a similar specialized platform by
a company that has knowledge of
local conditions.
1. Reluctance to publish data by the
companies targeted by the platform.
2. Competition between companies that
could cooperate as they have/need
spaces of similar specifications can
make the operation of the
platform difficult.
3. Possibility of dynamic entry from
strong foreign companies operating in
the same field when the viability of the
project is proven.
4. Unstable demand cycles due to
unforeseen situations such as e.g., the
COVID-19 pandemic can cause
significant fluctuations in VFC revenue
and consequently in its viability.
5. Difficulty in choosing the appropriate
pricing policy.
The SWOT analysis shows that the strengths of VFC, as well as the potential oppor-
tunities that it presents, may create the conditions to change the correlations in the Greek
warehousing market (operating in a similar way to disruptive technologies) and can put
VFC as leader of the new condition. On the other side, the weaknesses and most of the
threats could be eliminated through:
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
The next element in the development of the VFC business model was to determine a
sustainable revenue model based on multiple factors that can highly influence the choice of
the appropriate pricing policy of the VFC. Before the revenue model, an in-depth analysis
of the total Greek market and the potential VFC penetration formulated a robust analysis
in order to identify the appropriate pricing policy and the projected incomes and expenses
for a sustainable feasibility study to rely on.
Future Transp. 2022,2476
The extensive research and the relative VFC services showed that VFC aims to pene-
trate (a) to the existing overstock market of Logistics Service Providers (LSP) and (b) to the
new market of outsourcing logistics services. The market analysis in Greece and the specific
targets for VFC showed a remarkable market size [
]. An industry report by ICAP for
2018 showed that the market for LSPs is estimated to produce revenues of
418.9 million,
with significant growth prospects for the next five years. According to the same study,
LSP revenues from warehousing services account for 59.5% of total revenues (
million), with 34.5% of these (
86.2 million) net for pallet storage services (excluding pallet
import and export services or other services such as returns). From this amount (
million/25% of the total) comes the main target market of VFC in terms of the LSP market.
Based on the same research, it is worth mentioning that dry cargo storage services
account for 75% of the total market revenue (
64.49 m), while refrigerated product storage
services account for the remaining 25% (
21.5 m). In addition, with the current LSP
market condition, a significant market share is expected to result from the strengthening
of outsourcing in logistics. Currently, many companies do not have a logistics service
provider, thus resulting in low logistics outsourcing (less than 40%) compared with the rest
of Europe (more than 70%) [
]. Our estimation for the upcoming years is that outsourcing,
especially for warehousing services, will significantly rise, thus revealing an important area
for penetration for the VFC. Finalizing all the above, the total target market for the 1st year
of operation of the VFC is estimated at 90.29 m, as summarized in Table 2below.
Table 2. Summary of VFC Target Market Size Estimations (in million ) (source: Authors’ survey).
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
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
Based on the analyses and estimates of the VFC sustainability report, the overstock
market in the existing LSP market and the new outsourcing market are expected to be VFC’s
most important sources of revenue. The percentages of overstock storage were estimated at
35%, 15% and 40% of the total dry, refrigerated and frozen cargo storage, respectively. The
penetration in these markets is expected at the start of the operation (2022) to be around
2.5% for dry cargo, 0.5% for refrigerated and 3% for frozen cargo. with a prospect that
by the end of 2027, the penetration in this target market could reach 4.2%, 1.1% and 5.9%,
respectively, for the target market of LSPs.
For the new outsourcing market, it is estimated that VFC will have significantly greater
penetration. After all, VFC aspires to be a catalyst for enhancing outsourcing, as it provides
businesses with a tool that will allow them to have complete control over the cost and
quality of their logistics activities even after outsourcing these activities. The penetration
in these markets is expected at the start of the operation to be around 3.5% for dry cargo,
1.0% for refrigerated and 5.0% for frozen cargo; with a prospect until the end of 2027, the
penetration in this market may reach 11.0%, 2.4% and 14.7%, respectively. Based on the
analysis above, the revenue model is developed in order to ensure the viability of the
VFC platform. To develop the revenue and expenditure calculation model considers the
following assumptions:
Future Transp. 2022,2477
The first assumption concerns the growth rate of the logistics market. This rate is
calculated from the GDP growth rate and a logistics-specific multiplier, which considers
that the logistics market increases 1.5 times faster than GDP growth [
]. This view con-
siders international benchmarks and the fact that falling prices and offers on commodities
ultimately lead to an increase in moving cargo even when consumption is stable. Another
key assumption concerns inflation in both equipment supply prices and employee payroll.
The first affects the operating costs of VFC (e.g., purchase of equipment), but it mainly
affects the revenue, as it affects the cost of logistics services by users-sellers of the platform,
on which the VFC commission is calculated.
Based on the above assumptions, VFC developed its pricing policy in order to ensure a
viable revenue and expenditure model. The revenue model is developed in two areas. The
first area is a 5% commission charge per transaction, which is allocated 2.5% to users-sellers
and 2.5% to users-buyers. The second area is a 20
monthly fee for using the platform
regardless of the number of transactions. Finally, in order to give the necessary boost for a
new platform, it was decided to provide a bonus of free months of subscription in the first
two years. The commission on transactions used by VFC is a common revenue model for
international on-demand services and especially for those that have the same object as VFC
(Flexe, Stockbooking, Stowga). Utilizing the practices of the above companies, users are
willing to pay a commission on the transaction to use the services offered by the platform
to save valuable time but also to enjoy the preferential prices guaranteed by the fair pricing
algorithm. For the monthly subscription revenue, it is necessary to estimate the number of
users who will register in the VFC. There are two kinds of users in the VFC platform, the
users-buyers and the users-sellers. It is estimated that the registered buyers will outnumber
the sellers, thus providing a wealthy competition between the registered users. The revenue
from the monthly subscriptions is not considered critical for the long-term viability of the
VFC platform since the main revenue comes for the transaction fees.
On the other hand, it is necessary to calculate a robust expenditure model in order to
cover at least the initial capital expenses in the beginning of the platform. The expenditure
model considered the capital expenses (SQL server license, PCs, offices and decorations)
and the operational expenses. The operational expenses of the VFC platform concern the
following categories:
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.
All the above expenses were considered, where inflation has also been considered on
the basis of pre-determined annual rates. Based on the previous analysis for the calculation
of the market penetration that VFC will succeed, the estimated income and the expenses,
we come to the forecast of the results for the period of 6 years in Table 3.
In the first year, there is a negative EBT of
216 thousand, which must be serviced
with equity and borrowing. Respectively, the second year also shows significant losses,
although they have decreased to below half of the first year. But again, these would mean
that you have to spend for these processes. For the rest, from the third year onwards, the
platform’s revenue is already very significant, allowing the immediate reversal of the EBIT
37.5% in 2023 to +24% in 2024. Maintaining a conservative market share in the target
market close to 5%, VFC rapidly increases its revenues as the market grows and expands
with the parallel strengthening of outsourcing.
Future Transp. 2022,2478
Table 3. Profit & loss statement forecast (source: Authors’ survey).
(‘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
3.4. Development of Business Model Canvas
Business Model Canvas (BMC) is a graphical representation of the basis of the business.
The nine basic building blocks show how VFC plans to be a profitable and sustainable
online platform in the long run. The nine blocks cover four key areas of the VFC business:
(a) customers, (b) supply, (c) infrastructure and (d) financial viability, and this is why it was
selected as the preferred representation of the VFC business model.
Composing all the above basic elements for VFC, we conclude to present the Business
Model Canvas developed for the VFC platform. The seamless implementation of the
proposed BMC will ensure the long-term viability of the platform and can be also applied
in other similar businesses. The proposed BMC is depicted in Table 4.
Table 4. VFC Business Model Canvas (source: Authors’ survey).
Key Partners Key Activities Value Propositions Customer
Customer reward
Logistics and
warehousing market
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;
Future Transp. 2022,2479
Table 4. Cont.
Key Partners Key Activities Value Propositions Customer
Marketing &
Collection and analysis
of market data;
Providing a tool to
support the design and
management of a
business storage
Warehouse owners;
Ability to provide
personal training on
the services of the VFC;
Technology providers. Dynamic Contracts
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
Key Resources Channels Non-logistics market.
Excellent knowledge of
the warehousing
Fair pricing and
intelligent matching
Advertising in means
of the logistics sector;
Social networks;
Design and support of
the platform;
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.
4. Discussion
This paper performs a business model analysis of a smart city logistics solution, the
first on-demand warehousing e-marketplace in Greece. Recent advances in the technology
sector and the increased need for responsiveness from businesses to customers, have created
the conditions for a wider adoption of the sharing economy and the subsequent emergence
of then on-demand platforms and their respective business models. The present research
captured the existing warehousing business models and the corresponding needs in the
Greek market by addressing the current challenges in adopting on-demand warehousing
solutions. The paper resulted in a clear and detailed description of a picture of the business
model developed by VFC, mapped in nine blocks of the Business Model Canvas. The value
proposition offered by the VFC is an on-demand digital platform that offers significant
Future Transp. 2022,2480
benefits to its two kinds of users, the users-buyers and the user-sellers that have unpredicted
warehousing needs in their business. This paper also provides a robust revenue and
expenditure model developed for the VFC in order to ensure its long-term viability in a
constantly growing and fast changing environment.
The chosen methodology is not without limitations. First, the penetration shares and
the revenue model are based on well-placed estimations, which can be very sensitive to
supply chain disruptions such as the current COVID-19 pandemic. It is assumed, though,
that starting the operation of the VFC platform from 2022, the pandemic will be over and
the forecasts will be as accurate as possible. In any case, a COVID-19 resistance scenario
has also been developed, but the continuation of extreme conditions is out of the scope of
this paper.
5. Conclusions
The purpose of this paper is to present a business model analysis for digital platforms
by using the case of the first on-demand warehousing platform in Greece. The massive
increase in e-commerce and the consequent evolution of the sharing economy to respond to
such an increase created the need for new innovative business models in order to enhance
the long-term sustainability and economic viability of such e-marketplaces. The results for
the Greek market show that although there are a lot of challenges to be addressed, there is
enough space and remarkable opportunities for new smart solutions in the logistics and
warehousing sector that can be viable in the long-term. The present paper concludes by
presenting the business model developed by the VFC, using the Business Model Canvas
tool, showing clearly the identified content on the nine blocks of the BMC.
Author Contributions:
The conceptualization of the present research was done by G.A. and L.P. The
methodology was developed by G.A. and the validation of the work was accomplished by E.X., G.T.
and O.T. The original draft preparation was done by L.P. while the review and editing process was
done by E.X. under the supervision of G.A. All authors have read and agreed to the published version
of the manuscript.
This research has been co-financed by the European Regional Development Fund of
the European Union and Greek national funds through the Operational Program Competitive-
ness, Entrepreneurship and Innovation, under the call RESEARCH—CREATE—INNOVATE (project
code: T1EDK-04383).
Institutional Review Board Statement: Not applicable.
Data Availability Statement:
3rd Party Data Restrictions apply to the availability of these data. Data
was obtained from Planning S.A., subcontractor of the project, and are not available.
Conflicts of Interest: The authors declare no conflict of interest.
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The growth of e-commerce is accompanied by an increasing distribution of parcels in cities resulting in externalities like traffic congestion or emissions. As a consequence, different delivery concepts like bike deliveries or delivery points have been suggested. Naturally, companies will only accept these changes, if they do not result in higher costs. However, it is difficult to predict the impact of a certain delivery concept in a certain city. This leads to the research question, how different delivery scenarios for a certain area can be assessed and compared, especially if some of them have not been implemented.
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Growth in e-commerce has led to increasing use of light goods vehicles for parcel deliveries in urban areas. This paper provides an insight into the reasons behind this growth and the resulting effort required to meet the exacting delivery services offered by e-retailers which often lead to poor vehicle utilisation in the last-mile operation, as well as the duplication of delivery services in urban centres as competitors vie for business. A case study investigating current parcel delivery operations in central London identified the scale of the challenge facing the last-mile parcel delivery driver, highlighting the importance of walking which can account for 62% of the total vehicle round time and 40% of the total round distance in the operations studied. The characteristics of these operations are in direct conflict with the urban infrastructure which is being increasingly redesigned in favour of walking, cycling and public transport, reducing the kerbside accessibility for last-mile operations. The paper highlights other pressures on last-mile operators associated with managing seasonal peaks in demand; reduced lead times between customers placing orders and deliveries being made; meeting delivery time windows; first-time delivery failure rates and the need to manage high levels of product returns. It concludes by describing a range of initiatives that retailers and parcel carriers, sometimes in conjunction with city authorities, can implement to reduce the costs associated with last-mile delivery, without negatively impacting on customer service levels.
Being successfully applied in business-to-consumer industries for quite some time, digital platforms only recently have found their way into the industrial business-to-business world. However, rapid developments, particularly in the context of Industry 4.0, have indicated enormous potentials from digital platforms for business models and inter-company relationships – fields of particular importance in industrial marketing. Motivated by a lack of empirical insights and calls from academia and practice, this paper sheds light on how digital platforms change industrial firms’ business models and inter-company relationships. We applied an exploratory case study design and analyzed a unique sample of 11 platform cases from the United States and Germany, differentiating between platform types and roles. The study reveals recurring themes in business model innovation and inter-company relationships. The results were elicited using a quasi-statistical approach, discussed and interpreted against the backdrop of the current state of research on platforms, business models, and industrial marketing.
The necessity for creating flexible and agile supply chains and adapt on the continuously changing and quite competitive e-commerce logistics market, has made warehousing a strategically critical component of the supply chains. In response to that, new logistics concepts such as on-demand logistics and shared warehousing popped up recently, which with the help of the e-marketplaces offer innovative logistics solutions through a single access point and support the logistics actors to: easily optimize the capacity of their warehouse, avoid the fixed costs of owning a warehouse; implement short-term supply chain planning and finally come closer to the end-customer. Although several on-demand warehousing practices can be seen worldwide, the Greek economic crisis delayed until recently the emergence of such trends so, little is known on how the Greek market would respond to such changes. In response to that, this paper introduces briefly the first on-demand warehousing platform to be operating in Greece and closes the knowledge gap on the Greek market’s response following a three-step methodological process: conducting a dedicated questionnaire survey circulated to different types of businesses, arranging logistics expert groups and carrying out extensive desktop research. The paper shows that the Greek stakeholders are quite familiar to shared warehousing solutions and they are open to digital changes such as using an on-demand warehousing platform. However, they are less willing to apply such innovations to their daily business. Therefore, specific platform requirements for increasing the attractiveness of such tools to the Greek market are also highlighted.
City logistics is one of the significant branches of supply chain management, dealing with the logistics and transportation activities in urban areas. This research area has recently appropriated an exponential growth of publications. This paper presents a bibliometric analysis along with a systematic literature review to organise the results of surveying more than 370 papers and research works published since 2010. We identify the top contributing research topics. The most common keywords used in the city logistics literature are referred to in order to propose six research categories identifying the main innovative research perspectives.