Charlie Schilla with a bubble-wrap-making machine at Supply Hut's plant on Cleveland's West Side.
Charlie Schilla has a problem.
Supplyhut LLC, his packaging supply company has 65,000 square feet of space at its West Side building in Cleveland, but the business is rapidly growing, and new equipment is coming to keep up with demand.
Bottom line: big success means a need for more space.
“We’ve looked at so many places already,” he said.
It's a good problem to have, brought on by success. Supplyhut did about $10 million in sales last year. That's a 32% increase over sales of $6.8 million in 2023, Schilla said, and well beyond the $3.5 million in 2019.
Schilla predicts sales this year will be between $12 million and $15 million, a range he admits might be a bit conservative.
Supplyhut doesn’t sell to big retailers or manufacturers but, rather, to small businesses and individuals that do business on eBay, Amazon or other online platforms. They buy the company's bubble wrap, packing peanuts, specially sized and padded envelopes and boxes to package and ship their goods.
Schilla said the exploding world of online sales is creating more customers for Supplyhut and more ways to reach them. The company recently began selling online via Target and Sears.
Although he’s just 34, Schilla already has spent almost half his life as an entrepreneur.
He started as a teenager in 2009 when local office supply retailer InkStop had a going-out-of-business sale. He spent $300 buying supplies he figured would sell best. His hunch paid off and he brought in around $1,800 on eBay.
He used that money to repeat the process, finally buying out all of InkStop’s remaining inventory.
Eventually, he did business directly with material suppliers, including some who didn’t take him seriously.
“I went with him to visit one company and the man kept talking to me. I said, 'Why are you talking to me? It’s his business,” Edie Schilla, Charlie's mother, recalls. “He looked at Charlie and said, ‘Are you actually going to buy something?’ Charlie took out his checkbook and said ‘Yes, I can pay you for one truckload now.’”
Schilla eventually realized that the money wasn’t in the inexpensive products he was selling but in the packaging.
“I was looking at this cell phone case and thinking: nine dollars? That probably cost a dollar to make. The rest is packaging,” he recalls.
He also knew that many people like him were selling products and buying packaging materials from retailers whose prices he thought he could beat.
So Schilla pivoted to buying and selling packaging materials and created boxes, envelopes and containers from those supplies.
Today, Schilla makes his own supplies and is reaping the rewards.
He still owns 100% of his business, which is debt-free, he said. But now he has other needs.
“I need more people and I need more space,” Schilla said.
He’s not worried about finding the people. Supply Hut has been able to find the employees it needs within Cleveland. The company employs 25 people, up from 15 last year, and Schilla plans to hire five more this year.
Finding space, however, is proving difficult.
The current home of Supplyhut is full of materials such as bubble wrap and foam peanuts, and the equipment used to make it all.
More equipment is coming, too. Schilla recently ordered a pair of bubble wrap machines for over $200,000, a $45,000 machine to form pouches and a $45,000 machine to make films.
Schilla is doing what he can to make the current space work, but he’s running out of ways to create more room, he said.
“It’s growing faster than I imagined,” he said. “The shift to e-commerce is causing a lot more packaging to be used.”
Light industrial and warehouse space has often been scarce in and around Cleveland. Schilla said he’s aware of good space outside of town, such as Fogg’s development on Seasons Road in Stow. However, he wants to stay in Cleveland to be close to his employees and public transportation.
Terry Coyne, vice chairman of Newmark, predicts Schilla will find the space he needs to lease, though he said the challenge might be staying close to his current location on Elmwood Avenue.
“Where he is it’s really tight, that’s an old tight market,” Coyne said.
But, across Cleveland and in places like Cuyahoga Heights, there is space available.
“I could show him a site right now,” Coyne said. “There’s no new spec development right now, but you’ve got a decent amount of vacancy and supply is stable.”
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