Startup Aims to Give Everyone the Mighty Shipping Power of Amazon | Hacker News Reader

Startup Aims to Give Everyone the Mighty Shipping Power of Amazon

wired.com

160 pointsgozmike86 comments

If you need amazon like shipping, you can do fulfillment by amazon where you pay them to keep your products in their warehouse, and then they ship as directed.

Obviously competition is good, but I wonder what they offer beyond not being amazon

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After reading the article, it seems like the main unique offering is that they actually Pack your item, and take them from your home.

Seems like the article glosses over this aspect, focusing more on how they compare to amazon or other startups.

On purely ideological grounds, I'd prefer to use this service (or something similar) just to do my part to stop the impending and unassailable Amazon hegemony.

Do you still have to ship the item to Amazon with Fulfillment by Amazon?

Yeah, that's what makes it different from just being a third party merchant on Amazon.

No. Our service will pickup from your location at the point you need to ship.

Did you read the whole article? The value proposition is more that the company will send a courier to your home and take an unwrapped item to its warehouse to wrap then ship. Fulfillment by amazon requires you to do the wrapping and shipping (to Amazon). With that said, they only charge a $5 fee for this service, which seems unsustainable.

> With that said, they only charge a $5 fee for this service, which seems unsustainable.

Yeah. I don't understand how that even pays the carrier (+fuel). Let alone the packaging and the actual shipping to the end user.

They don't just charge 5 dollars. They also charge the cheapest retail shipping rate to the consumer. Meanwhile they pay a bulk discounted rate. They pocket the difference.

yep.

They also get a discount on shipping which they do not pass on to the consumer. As they scale that difference will become larger and larger. I think that's where they expect to get the bulk of their revenue.

> With that said, they only charge a $5 fee for this service, which seems unsustainable.

From the article:

> Because it ships so many packages, Gibbon says Shyp gets significant discounts from the major carriers. This makes sense because pooling packages saves their drivers a bunch of trips. “It’s actually a lot cheaper for them to just go here,” Gibbon says. Meanwhile, he says Shyp charges customers the cheapest retail price they would pay to ship an item, which still ends up being more than what the company pays. Shyp keeps the difference.

As for paying the couriers: if they can pick up several packages in one trip, that could add up to a decent hourly rate. Large items that result in fewer trips will produce a large shipping cost, out of which Shyp could pay the couriers, while small packages will produce many fees for the couriers.

Absolutely not true. As the article points out we actually make our money from the price arbitrage between retail and our discounted shipping price. The $5 covers the pickup of an item.

I love that you're based around the idea of arbitrage. It's one of the forces of our age, but few notice it explicitly.

I'm not sure Tim Ferriss ever used the word in the 4HWW, but it was the central idea I took from it. I'm not surprised he's an investor.

The big different is cost. We do not have to store any inventory so we can offer the same service for a much lower price point.

Instead of a company shipping all their items to amazon, we will fulfill out of your storage/office/home/coffee shop.

Plus you don't have to be as organized to pre-ship all your items to amazon's warehouse. Etsy/eBay/Shopfy sellers love it.

btw CEO of Shyp here.

How do the economics of dispatching somebody to pick up an item within half an hour work?

its really about demand and pickup density. This is why we will launch in major cities first. We spend less than 1min on average pickup up peoples items. So once we are able to get enough demand within a close proximity everything works out great.

Interesting.

What's the model in terms of vehicle ownership and driver salary? Will you be paying the driver a set rate for a set shift driving a company vehicle, as the likes of UPS do, of will you be paying the drivers per collection with them supplying maintaining and insuring their own vehicle, like Uber and Yodel?

At the point you become profitable, how many pickups/packages will each driver do per hour, and how much pay will each driver make per hour/pickup/package?

How much of the market do you aspire to cover - will your model extend to most of the country, or just dense urban areas with high levels of demand?

Do you have an api? I can imagine a bunch of ebay tools making good use of it.

Also, do you still use EasyPost?

We do not have a public api yet ;)

We used Easypost initially but have since moved off them.

Kevin - What if Amazon, UPS, Fedex start picking up consumers items?

This appears to be your unique advantage which reminds me a lot of Instacart/Uber in a sense of bringing the solution to the customer instead of having the customer coming to you.

They already pickup peoples items. However they are not setup logistically to handle 5-20min pickup times. They do something called a milk run which requires them to pre-schedule their routes before hand. They absolutely could offer this service in the future, it would just be logistically very difficult to build it into their current operations.

Our unique advantage is our product/experience UX and our focus on packaging. UPS, Fedex, USPS and our other partners all love us. They see us filling a much needed gap in the market. Just as stripe does for visa/mc/etc.

What these shipping companies are the best at is moving many packed items over large distances. Their logistics networks are unparalleled to no one. We just see a large gap in the first mile.

Great explanation of your value prop. Do you have a timeline for roll-out to other cities you can share?

We are launching NY in October. Then looking to stamp out cities as quickly as possible.

We have the barrier of a warehouse in every city + packers but just like anything once you do something enough times you get really good at it.

Looking to be extremely aggressive on city rollout.

"We have the barrier of a warehouse in every city"

I'm assuming when you do you are going to be locating your warehouse near Fedex/UPS depots then?

it really depends on a number of things. Fedex and UPS proximity play a part but other things like availability of a suitable warehouse in a reasonable amount of time is more important.

Looking forward to seeing you in the Minneapolis/St. Paul area ASAP for my own use, we have a great hub airport here - lots of cargo planes! :D

You folks would be my absolute heroes if you could partner(?) with another company so that I could take a picture of something in my house/garage that I want to get rid of, and then frictionlessly have it picked up/photographed/sold/shipped!!! I would kill for this service, and I'm guessing a lot of other people would too. I've got so much stuff that is not really needed anymore, but is too valuable to just throw/give away because I'd like to recover some money from it, but I'm too busy to sell it on eBay with all the time that it takes...

How much would you pay for this service? It's exactly one of the ideas I've been toying around with, but not one of the ones I'm currently working on.

That's the $64k question :) There seem to be a fair number of local people/shops that will do this for you (usually advertised as "we'll sell your stuff on eBay for you!"), but they take a really hefty cut, so much so that it usually isn't worth it for me to haul all my 'stuff' over to them... I'm hoping that a larger automated system like shyp would be able to reduce the seller cut to something more reasonable :)

Yeah, the eBay drop centers aren't a very good deal. As you mentioned, you have to take your stuff to them, and then they might not accept it. Most won't take anything under $50 in value, or anything over a certain size. Then they do very little effort in determining the right price, instead opting for no reserve auctions with really low starting bids. Then they keep 50% commission on average. So their value prop is essentially: bring us your stuff, we'll take some of it, sell it for less than it's worth, and then keep half of that.

I think creating a business that resold on Amazon would be smarter. It's less work, easier to price, and the customers there are willing to pay more than on eBay. You would be limited to only taking items that Amazon has in their system though. I was going to work on this (actually selling on a combo of Amazon/Craigslist/eBay), but I had the most hellacious back and forth string of emails and phone calls with Amazon's tech support only to confirm that they require $500/year developer fees for the privilege of developing software that works with their marketplace web services api. And unlike Apple where you only have to start paying once you wish to deploy an app into their app store, with Amazon you have to pay while developing the app too.

This is the dirty little secret that blocks innovation on Amazon's platform.

Why NY when you have other cities like Oakland, Berkeley, San Jose on your doorstep and huge territories like LA within the same state? Do you need a certain minimum residential density to break even?

We break into a city starting in a tight geography and expand outwards.

We don't consider Berkeley or Oakland as new cities as we can provide service from one warehouse. We will be overing service to those areas very shortly.

so your plan is basically Uber but transporting goods instead of people?

Interesting idea, the "milk run" has the advantage of being energy/cost efficient for UPS, but if you have Uber-like drivers that are willing to put a package in their trunk and drop it to a Shyp warehouse for a cheap price, why not!

This is great.

Your organization is fulfilling the instant gratification need that the bigger guys aren't delivering on which is the value and revenue opportunity.

Did you start this company with the Uber ah ha moment? ie. why can't I push a button to do this or was it a pain point that evolved into a business model?

I used to be a very successful eBay power seller. I knew the pain-point myself very well. Wanted to solve it for others.

How can it possibly be profitable to courier packages like this? That is, without adding on $10+ in fees?

It has approximately the same economics as pizza delivery, minus everything that goes into making the pizza.

So the drivers will rely on tips? How much am I supposed to tip?

Ever try to ship via courier? It's a miserable experience. Eats up an average of 30-60 minutes setting it up, then you have to be at home at a specific time.

I imagine it works great if you have an account, volume, and dedicated staff + shipping area. But for consumers, it's not tempting.

I've donated some items I could have sold due to the annoyance. (You might think that would be a better outcome, but most of the items were pretty specific, and unlikely to find a good home through donation)

I don't get the economics of this. For example if you send more than 20 a month you get free pickup. In this scenario, with the example tshirt I would be paying $2.85 for you to pick it up, pack it with your own materials and cover shipping? Even if you got the shipping for half of that, won't the pickup and packing materials/ labour cost way more than a couple of dollars?

> you can do fulfillment by amazon

As long as you are willing to risk http://www.fbamastery.com/the-worst-amazon-horror-story-i-ha...

Wow, reading that kind of pissed me off.

Hopefully it gets more attention.

Seems ripe for some mischief. Order from every seller you can, file fake complaints, let Amazon sort it out. Although it sounded more like he was taken down due to an actual lawsuit, not just a customer complaint.

This is just barely an internet startup - it's actually a real, physical business doing physical things aided by technology. I wish them luck and hope they make it to Chicago.

Treat your couriers well and I'll never have to hate you:)

"Shyp charges customers the cheapest retail price they would pay to ship an item, which still ends up being more than what the company pays. Shyp keeps the difference."

This could be very helpful for those that do not have a business account with UPS or FedEx, but if you regularly ship packages then it is cheaper to do it yourself at some point.

Amazon pricing: http://services.amazon.com/fulfillment-by-amazon/pricing.htm... Using their Action Toy example costs $6.54 which would retail $8-12 depending on the distance sent from FedEx/UPS

The spot that Amazon really excels is standard verse two-day shipping ($4.75 compared to $7.75 for a non-media item).

It would be interesting if Shyp or someone could graph the optimum depending on your volume (a bit complicated to due to sizes, weight and frequency, but doable).

absolutely. The stuff we already do behind the scenes is quite incredible. Not ready to share anything yet but stay tuned.

btw CEO of shyp here.

"The coolest—and also biggest—tech in the place is a machine that takes raw cardboard and cuts custom-sized boxes that eliminate all the empty space that Amazon so often fills with those plastic air-filled bags. And smaller boxes can mean lower shipping prices."

Lower shipping costs? Apparently not for Amazon. Impossible to believe that they haven't correctly factored in box cost, size and filler material in terms of the rates that they pay vs. everyone else. Plus packing multiple items (for one shipment) is different than packing a single item as well.

... Where Everyone < Population of San Francisco

Fixed.

The article doesn't really touch upon speed of delivery (to customer) and consistency, which (speaking as a consumer) is Amazon's true magic sauce.

The reason I buy almost everything I buy online via Amazon is that if it is sold by or fulfilled by Amazon and I order it I will get it exactly when I specify 99% of the time (generally two days from order, unless I really want to pay the extra ~$4 for one day on top of my Prime membership). Every other shipping/buying concern is completely secondary for me -- sellers who sell on Amazon but don't fulfill via Amazon offer very little benefit (ease of one-click shopping is nothing compared to the nearly guaranteed consistent delivery, at least for me).

I actually wish more companies than Amazon (and Newegg) would handle this sort of consistency better because I'd love to spread my dollars around more, but those are the only two that have earned my trust in this area. Every other online seller I've used might as well have "???" listed for shipping times because that's what actually happens.

This is exactly the service we are offering to everyone (SF only now, NY in oct) who doesn't use Amazon fulfillment.

The things we are doing behind the scenes to aim for cheapest/fastest service is unbelievable. We will continue to innovate here so business/consumers can focus on what they do best. Shipping is what we do best.

Amazon's speed of delivery has gotten worse and worse over the years. 5 years ago I would get anything I order within 3-4 days. Now it's two weeks when using their free shipping.

I'm not paying $100 extra for Prime just to get things shipped in a reasonable time-frame... because those other services that are bundled with Prime are worthless to me.

Since Amazon has been so bad, now I use websites that focus on niches (one website for computer-related items, one for supplements etc.). All these websites offer free shipping much faster than Amazon.

What cities are they in right now? I would think it would be smart to do plugins for magento/woocommerce/presta/etc and let that trigger the orders. However not sure how this would work for moderate volume stuff that can't support the $5 eating into the margins.

This seems best suited for periodic sales off of ebay, not full time e-commerce plays.

San Francisco and launching in NY early Oct. Signup for NY access on our site now.

We do both. The benefit to not using a 3PL (Amazon logistics or other services) is that we don't ever store your items. We ship from your location on-demand. So our costs are less which we pass on.

We actually see a lot of omni-channel retailers love using our service. They utilize their in-store inventory to ship out as purchases come in.

Sounds really, really great to me. I've got some cell phones, an old Kindle reader, and some control4 stuff at home that's been there for like a year, mostly b/c it's too much of a pain to pack and sell. eBay provided an app recently that makes it easier to sell but doesn't solve the shipping problem. Also, it's iOS only and not available in my area I think. I could take these items to Staples to pack and ship but then I get hosed, such that it's cheaper to throw it away than sell it. I mean shipping a printer is like $100 from Staples but Amazon includes it free in the price of a $90 printer somehow.

So I'd say there's huge potential in this business. I'd actually prefer to see it under Amazon's roof but fine separate as well as long as they can scale quickly and without a lot of hiccups.

Maybe it's just me, but I found the custom box cutting machine to be the coolest part of this article.

Yeah, it was interesting.

yeah - I'm surprised that they didn't go into more depth about that. Apparently the machine is made by Packsize: http://www.packsize.com/products/em-7

I can't imagine this would be feasible for any online retailer. The only exception I can think of is if you just raised a bunch of money and want to figure out fulfillment later, but you will most definitely have UPS/FedEx trucks docking at your warehouse with any real volume. The solution seems great for someone wanting to sell random items they no longer want to own on eBay but the benefits of the easy to use app are also negatives for a business who are shipping the same product over and over. No business should settle for retail pricing, unless in the future you can get better volume rates with Shyp than you would on your volume. The implied market and comparison to Amazon seems off in this article.

I didn't see this as being a business service at all, it seems completely aimed at a consumer and maybe hobbyist market. The comparison to Amazon is just about bringing the convenience, not the scale.

I've had to ship a few things here and there, and it's always been annoying. Even when Seagate sent me all the necessary packaging when I needed to RMA a hard drive, I still ended up having to drive over to the UPS location to drop it off. Finding an appropriately sized box and getting a hold of just enough packaging to fill the gaps is not something I want to waste time on when shipping something, especially if the item itself is <$100 to begin with.

Whether regular people will start shipping enough stuff to make this company profitable is another matter, but I would certainly love to have this option around next time I need to ship something.

"I didn't see this as being a business service at all"

They could handle returns and repair logistics for companies once the network is built.

Cases where a bad item needs to be picked up and there is either no packing material or it's the type that needs to be repacked. Or it's a 27" Imac and the owner is a person that can't pack it properly and get it back to Apple (I've seen where Apple will dispatch a tech to a home to fix a problem in a Mac Pro so they send out a tech (to a home). Here they could issue a pickup (non business, non critical of course). Less costly. Pickup and repair at the "depot".

Or say I have a rack server that I want retrieved and shipped somewhere and I don't want to trust that the colo people derack and ship properly. (This would tech specialized staff for sure but that's my point. There are many places you can go with this).

There are already logistics companies that do similar things (contracting with businesses) for delivery of home appliances, exercise equipment etc. This is in a sense the reverse of that.

Not to mention that a company like this is a total acquisition target by a major shipper once the network is built.

Add to it that I suspect self-shipping tends to end up being more expensive than it needs to be for individuals, too. The selection boxes offered at retail shipping locations is limited, so you almost invariably end up paying to ship a bigger box than is necessary.

Maybe if you're the kind of person to save boxes you can often find one that fits well in your basement, but for the urban markets they're looking to serve most people will be living in smaller residences without a lot of space for packratting cardboard.

Not to mention that packratting cardboard can be bad for pests and fires. Or rather, good for those things and thereby bad for people.

I'm wondering how scalable this service will be outside of cities. I just moved into a new apartment and I'm shopping around for furniture - exploring craigslist postings, etc.

I drive a sedan and while I'm willing to drive half an hour or so to pick up furniture, I can't fit very much in my car.

Renting a truck is sort of impractical for moving just one item. If I could use Shyp like a taxi service, waiting twenty minutes or so for a courier to come and pick up a large item, and then having them deliver it directly to my place for a reasonable fee, well, that would be pretty amazing. I'm not sure if that is feasible, or even part of the vision of the company, but I want it now!

The value Shyp really provides is taking the guess work out of rate and service shopping. I'm heavily involved in the logistics of my company's shipping and dimensional weights, speed of delivery, and volume all play a huge part in keeping your shipping costs down.

My company was leaving a lot of money on the table until we got shipping costs under control. I could very easily see startups making catastrophic decisions in this area of fulfillment that another company could help with.

There's a lot of innovation to be done in the shipping industry. Here in Canada, shipping is very expensive. I've seen a few companies sprout up now that take your packages, drive down to the US and ship from within the border. This allows Canadians to ship packages as if they're US domestic packages.

I can ship something to Hawaii for less than it would cost to ship from Toronto to Vancouver. It's insane.

Interesting - I've always used USPS Flat-Rate Priority Mail: 2 or 3 day service; free boxes; no need to weigh; free pickup at my door. About $5 for small boxes; $10 for medium boxes; $15 for larger boxes.

I still hope that the USPS would build an easier website to use - it's good, but it's not "Uber-easy". Can someone that uses Shyp comment - is Shyp the service I've been waiting for?

USPS flat rate is actually only the cheapest USPS option if you are shipping > 11 lbs. I guarantee you that if you use us it will be cheaper (even including our $5 pickup fee) than for you to do it yourself with all free packaging materials. Then factor what your time is worth.

UPS ground and fedex ground are actually the best/cheapest option if you are shipping anything > 3 lbs. We choose the cheapest carrier automatically and create a custom box for each item.

btw CEO of Shyp here.

whats the cheapest if you are shipping 1 lb domestically and need a tracking number?

USPS priority. If it is <= 13 oz you could use first class.

Their price point can't be beat for < 3 lb items domestically.

UPS Mail Innovations beats out USPS First Class for us in price and accountability. Because they push through UPS's system all the way to regional facilities, we're seeing less package claims.

UPS SurePost also can be competitive if you put them through the wringer. From 1-9lbs we're saving between $0.08 to over $22.00 across the Contiguous US.

USPS almost retained our business from 10-15lbs, but we got UPS to match them.

Interesting - I definitely accept the value-of-time argument (that's why I just use flat-rate, rather than going to the effort of weighing the package). Sounds like I should try Shyp next time!

Its kind of an inverted version of Kosmo.com

http://en.wikipedia.org/wiki/Kozmo.com

Kozmo promised to delivery anything anywhere within an hour whereas Shyp promises to pick up anything within an hour. Lets hope it doesn't go the same way as Kosmo.

I often look for baby items on eBay. They use stuff for such a short period that used is a great way to go, but with shipping costs it's rarely any cheaper than Amazon for new items. Hopefully this, or a convenient way to exchange local used items solves that.

Their CEO was on "This Week in Startups", there's a bunch of interesting details around their model, if you don't mind the video

https://www.youtube.com/watch?v=1mr3YnULZs8

I've been waiting for Shyp to launch an API. There are plenty of apps out there that can use an experience like the one Shyp provides.

Sounds like it fills a need effectively for the Disposable Income San Francisco Dweller.

But "everyone" has got to be misleading, right? No way this is cost-effective for someone whose shipping margins are thin like an eBay seller.

And there is no way to scale this across the country without essentially needing a warehouse full of packers, at which point you are basically in Amazon territory competing with them at their own game.

I guess this can be successful as long as the company stays small.

They might also capitalize on the "ugh factor" ("ugh, I have to pack this and make a shipping label"), especially for occasional or one-time eBay sellers rather than professionals.

not true (disposable income SF dwellers). Using our service will be cheaper than doing it yourself. As we create custom boxes (reduces weight and size) and choose the best carrier for each shipment we are able to offer a very convenient service for a cheaper price that you could get yourself.

We will need to have a warehouse in every major city we launch in. It is a barrier but I can tell you we have the very best team to launch each city cheaply and at a ridiculous pace. We are launching NYC in oct.

Kevin - How much do you ship to Central and South America?

There is a cool company in New York called Shipster, I think in some ways they are better than Shyp. Check them out. This looks like the new Uber vs. Lyft rivalry to me

What makes them seem better than Shyp? On the surface, Shipster seems much younger and looks like a copycat player.

Nothing against copying and competing really, but would like to understand the basis of your claims on the ways they are better.

I travel between san francisco and new york all the time and tried both services.

Honestly, I liked that shipster gave me a price upfront for all shipping speeds and that I could track my shipments more intuitively from the app. That was way way better.

Shyp is obviously in the press all the time, but that doesnt mean its a better service.

You can select 'shipping options' and get a quote in there.

We are continuously A/B testing every interaction and hiding the price in a sub-menu helped across the board.

Taking a ~$3 million seed round to buy customers and expensive toys must be fun. But its not a business. Can you keep this up without investor cash to burn through?

yes

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