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FBA is literally 2-3x industry standard pricing and is used almost entirely in order to increase the value proposition to buyers from/in the Amazon markerplaces exclusively. Pretty much no one sells through other channels and ships from FBA. Many sellers maintain a non-amazon warehouse.

Having said that, I am guessing this startup is not attempting to compete on pricing.

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You hit it on the nose. People rarely decide between us and Amazon, usually it is between some random fulfillment centers their friends heard of and us. We have been pretty competitive on price so far, but mostly our benefit is we give total pricling upfront. Seemingly cheaper warehouses will give a low rate, but what is the true cost of using them? Are you hiring people or paying for mistakes they make?

We do our best to be price competitive which is part of our pricing model. We never try to win on a price war but we're better in terms of pricing compared to both FBA & Shipwire.

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