Should retailers outsource delivery logistics?
Promising to help smaller to mid-size online sellers “achieve the scale, speed, reach and efficiency of Amazon,” ShipBob recently raised $4 million in a round of funding to further its expansion.
The Chicago-based outsourced packaging and shipping startup said that while e-commerce platforms have simplified the process of selling online, the fulfillment process remains antiquated.
“My cofounder and I were running an e-commerce store ourselves and every time we got an order, we had to go to the post office and stand in line to mail our items,” said ShipBob co-founder Dhruv Saxena in a statement.
Most SMBs must use multiple products and services to achieve the various steps of the fulfillment process. Often, none of the systems talk to one other, leading to inefficiencies and mistakes. Hiring full-time packers, operating warehouses and postage costs can also become prohibitively expensive.
Using a single platform, ShipBob receives orders made through clients’ e-commerce websites, packs the items up and ships them to buyers. Beyond order management, inventory management and customer communication, ShipBob also optimizes savings for businesses by comparing USPS, UPS, FedEx and DHL for the lowest shipping rates it gains from its bulk deliveries. The company also offers warehousing.
“When a merchant makes a sale, all they have to do is schedule a pickup and ShipBob takes care of the rest,” ShipBob said in its statement.
ShipBob works with sellers on Amazon, eBay or Etsy as well as platforms created with tools like Shopify and Bitcommerce. Merchants pay ShipBob a small subscription fee for any service they use and the cost of discounted postage. For instance, in-store pick-up costs $5.00 plus postage.
Operationally profitable in Chicago and New York, ShipBob plans to launch in another city later this summer and reach another four over the next year.
DISCUSSION QUESTIONS: What do you see as the upside and downside to small to mid-size retailers outsourcing packaging and shipping? What questions should retailers have for ShipBob?