Video Of The Week: Shipping As A Competitive Advantage
Our portfolio company Shippo is helping ecommerce companies compete with Amazon by making shipping easier and less expensive to offer.
In this short(ish) video, Shippo’s founder and CEO, Laura Behrens Wu explains how they do that and why it is so important.
I am sorry this is twice in a week.This is a nasty comment.Her English is perfect. Speaking to my wife’s family in Alabama this week they have a much stronger accent.We are so lucky that so many other people are willing to speak English. I travel the world and I can universally communicate with people in English.We should be amazed and deeply appreciative that we can do this as English speakers.I would never consider giving somebody a hard time in that they don’t pronounce something the way I expect. I am just grateful they made the huge effort to learn how to communicate with me versus me them.
The Shippo founders are from Germany so that means they speak more languages than English. Moreover, Laura Behrens Wu grew up in Germany, China, Ecuador and the US, so it’s likely she also speaks German, Chinese and Spanish.I think it’s terrific she and her team are tackling this problem and terrific that she’s the CEO.
I agree. I think when it comes to mass merchandize Amazon has won on the eCommerce side look at the difference in shipping costs, that doesn’t take into account, picking, packing, and buying.But I have been put off at shipping costs when I buy boutique stuff.She makes a really good point. You might consider raising the price and giving “free” shipping.Really good point.If you want to talk about “setting the battlefield” which I think is the most critical thing in selling Amazon has done that masterfully. I expect free shipping.
Shipping, like on-demand transportation, is a classical Operational Research problem to which Machine Learning can be applied. They taught us in maths degree. https://uploads.disquscdn.c…
I have some ‘services’ that I sell online where there are various costs involved and customers have a choice of getting the service done faster by paying an extra fee. And the extra fees allow expedite in different ways hours wise (let’s say). 2 to 4 hours, 8 to 24 hours and so on.So in some cases the cost of the service is $x and you can pay $5 to $25 to get it done faster. (Not the real numbers). Depending on who you are and who is paying (you or your employer) as well as why you need the service done (how critical) you will then dial in the option that suits you best. Then you simply exceed the customers expectations with the time period they choose (if you can) and viola you have a happy customer who paid you an additional fee. If you can’t exceed it they are still happy. It’s like the airline charging you extra for a premium seat and then bumping you to first class.One thing is back in the 80’s when we were doing deliveries at the business I had then (which is still around today just not owned by me I sold it) one day I woke up and decided to charge for deliveries. So we tacked on $2 to $4 charge and had almost no complaints or even comments. It was instant revenue.  We didn’t even tell people we were doing this. We just added the charge. Anyone who complained (don’t recall that anyone did but maybe a few did) we just took the charge off. (Instant positive people love that type of thing). Driver probably made $10 an hour at that time if that. Maybe $8. 10 to 15 deliveries a day so… https://uploads.disquscdn.c…
I agree. Not a nice comment
it wasn’t “nasty”. being not nice is different, but if you’re happy for people to aim low and hit that target then so be it.
agree. I would mangle any other language, and with my Chicago accent tend to mangle the English one too.
I try and learn 20 words of the language when I go to a different country. I know I mangle the hell out of them but universally people smile and nod their head.The problem I have is it makes people think about how she said it instead of what she is said. It made me.You want to say I think Amazon won, too bad for you small retailer, I’ll listen, you want to tell me you think 7 days is way to long in today’s I want it now society……I can hear you.Look at Arnold’s comment. That is what I like.
I’m the same. I went to Prague and learnt some Czech beforehand.Precise pronunciation isn’t what matters. What people appreciate is that we make the effort to be curious and appreciative of their culture, and that includes their language.
she has little accent but you can tell a technical public speaking engagement in a second or third language is tough for her.she showed courage
.It’s a dopey comment. Doesn’t deserve all the hub bub. People should be allowed to be dopey. My Chinese is terrible.JLMwww.themusingsofthebigredca…
I believe in Gulianni’s broken window theory.
.Got it. Rudy Guilani, KBE, did not invent the broken window theory, but he did like it.Fair play, but it makes things so tiresome, no? See, you made me comment.JLMwww.themusingsofthebigredca…
I believe in that concept as well. It also applies to many types of relationships I have found as well as child raising. People need clear expectations and rules and to know consequences. And they want that as well. Children I have found happier this way.What’s amazing is how many years we had those sqeegee men when you got out of the tunnels in NYC. Such a big city, so much going on, and nobody thought to try to stop that. It’s as if they can do all these great things and have all of this economic power and prestige but can’t figure out a way to solve a simple and in my opinion important and annoying problem. We have that a bit in Philly as well. Beggars when you get off a few roads (Walt Whitman to 95 S. comes to mind). For the life of me don’t understand why it’s allowed to happen. People seem to ignore and not care about small details. How many times have you gone to a supermarket and found the shopping carts nested and impossible to free? Why does this happen? Manager, bosses, district managers not ever go food shopping to even know that it happens? Don’t stand around and observe customers? Don’t hire people to do so? To isolated? To big picture and only focusing on top and bottom line?
Yesss. Wish we practiced that in Chicago. Too bad they don’t in NYC anymore.
Don’t be sorry Philip. Say it and mean it.British English humour doesn’t travel. This is well understood, but culture is culture, and if you don’t get it i accept that.My central point, and as an English teacher to L2 English speakers in a previous career (trying to get students through tests so they could get visas to study in foreign countries), is that good presentation and communication requires rehearsal and rehearsal and rehearsal. This was none of those three. It was sloppy, and it didn’t need to be that way. Constantly stopping half way through a sentence, repeating, fluffing the script, it just wasn’t up to the mark. if that was a job interview someone else would have got the job.What lower standard do you aim for? I doubt that she was satisfied with the outcome. I hope she would not want to hear people say that it was an acceptable standard. aim high and fall a little short is the way forward.Nothing to do with accent. All about getting the words out first time.And while we’re here, what was my other “nasty” comment this week you refer to?
Well, your initial comment and link suggested a pronunciation problem, or a lack of command of the English language. I think most would take exception w/ that criticism. Your second comment (a segue weasel?) addresses her presentation style, and admittedly it’s a tad rough, though she does indicate this is her first time giving it (which would explain her nervousness.) I came away impressed w/ both Laura Behrens Wu and her company. #substanceoverstyle
Shippo or Sheep. Get it? No? Never mind.Two countries divided by a common language and divergent cultures.The weasal rests.
He’s kind of a cute fella though, no?https://puxccbo05z-flywheel…
but looking lean and mean 🙂
It was not yours. I understand that sometimes British humor doesn’t translate just like mine doesn’t when I go there.I tend to give people a break when I know that English is probably not their first language. I give people a break on accents including my British colleagues :-)Now saying you need to rehearse more? I can hear that.
It was not mine? Perhaps my blood is up, but to my eyes your comment implies that i made an earlier “nasty” comment this last week.What was this other “nasty” comment? I would like to read it to assess your definition of “nasty”. I’ll compare and contrast.
It was a sexist comment on the comment policy post. I am not sensitive, I can argue any point, I really don’t like it when the politically correct police come out. If it was meant to be a joke that’s great.NSFW: https://www.youtube.com/wat…
if you’re going to refer to a prior “nasty” in your reply to my “nasty” then please make it clear that i was not the author of it. i’m not a willing ‘three strikes’ candidate. thanks.
Certainly the comment was not you. You were not the author of the other one.
Speaking to my wife’s family in Alabama this week they have a much stronger accent.After reading what @jasonpwright:disqus said in reply to you though in a business context presentation does matter. Obviously. So it’s honestly not the same as whether my uncle has an accent (he did and a very strong one) or my Dad had an accent (he did but not that strong he learned english) or how my mom sounds (didn’t go to college but speaks fine). Or how your wife’s family sounds.I think as much as it stung Jason’s comment is a benefit in that Laura knows that someone noticed and perhaps that will be motivation to practice vs. everyone saying ‘this is wonderful’. What do you gain from that? They are running a company and want to be successful. Critique is more valuable and important (when stated well) than smoke blowing.The only obvious irony is that Jason didn’t communicate his point very well (I didn’t understand it until his rebuttal to you).
A great topic and have been watching this company since the beginning as boutique ebiz is an expertise of mine.Four pieces that she might address in her narrative:1. Cust service is key and I didn’t hear it mentioned. As important as price as there are always screw ups. Nothing is more important and expensive as fixing stuff.2. Growing brands don’t want arbitrage costs they want bulk discounts with one carrier to address consistency and service issues. Look at Allbirds, Mott & Bow, Mack Wheldon. Do they do this?3. She doesn’t address perishable shipping. A massive market and hugely difficult that many need assistance on.4. She is positioning herself as a ecommerce expert but actually she is a shipping expert. She is a partner not a designer of other peoples business. We all understand that shipping is key and I suggest a focus on her piece of it and sell that harder.So important a topic.I find the speaker very appealing btw though needs some guidance on some items as we all do.
Agree – (sinde she asked for feedback). Does anyone really need convincing that shipping is important? There must be something unique and special about her background and / or the German experience as to why she developed this solution. It would have been great to hear.
AmazonFresh gave a presentation in SF recently on their perishable strategy. The recent acquisition of Whole Foods is an indication of that focus.I agree there are lots of small grocers and artisanal providers of perishable goods that would love to have a shipping service. And imagine being able to send your best friend in New York some fruits that are only available in SF!https://www.youtube.com/wat…
There are people who focus on this especially through fed ex. They buy massive bulk discounts, have partnerships with packaging people and manage support.Non trivial and wonderful when it works.
Thanks, I didn’t know that!
As important as price as there are always screw ups. Nothing is more important and expensive as fixing stuff.Big opportunity though.As I learned in my first business, which by the nature of the business was prone to certain types of mistakes, it was possible to quite easily turn a negative into a positive We would mess up a customer order but then get it fixed in record time. Honestly, and I can say this without equivocation, it was usually better than if we never made the mistake in the first place. Really mean that from experience.  Part of the reason is that the customer has all of these fear and negative energy floating around and then you easily exceed their expectations by giving them something they don’t expect. Even though failed and disappointed them initially. Hard to explain in words but it’s a concept that almost begs to be repeated even when it’s not needed or mistakes aren’t made. (I guess a version of ‘deliver more than you promise’ but not really.) And my Amazon letter above is an example of that. Has to be handled the right way of course details matter.
> We would mess up a customer order but then get it fixed in record time. Honestly, and I can say this without equivocation, it was usually better than if we never made the mistake in the first place. Really mean that from experience.Old trick: I have a friend who found some little boats. They were mostly just two pieces of plastic, the bottom and the top. Each piece was made by warming the plastic and using a vacuum or air pressure to pull/push it into a mold. Then the two pieces were glued together, some hardware was added, and, presto, bingo, a little boat, for, say, 1-4 people.So, my friend got exclusive distribution rights for several states and went to work. Sometimes he would omit a few of the little parts, wait for the customer to call, and then go into fully over the top customer service mode to get the parts to the customer — all just stage play drama!IIRC he would go to, say, a car dealer and let them have a boat on display. So, the boats would get the traffic of the car dealers — if a person didn’t quite have money enough for a car, then maybe buy a little plastic boat cheap? So, my friend would get the order from the car dealer, arrange to ship/deliver the boat to the customer, have some part missing, and do the super high end, spit dancing on a hot griddle customer service act!Old story!One I liked was from Amazon: I wanted one of their $0.99 MP3 downloads, maybe the von Karajan performance of the Schmidt “Intermezzo to Notre Dame”, e.g., for one such Karajan performance,https://www.youtube.com/wat…So, I ordered the $0.99 MP3 version, flipped back in my Amazon Web pages to check some spelling for creating a subdirectory on my computer, flipped forward to do the download, and somehow the Amazon Web page logic didn’t let me do the download but did charge me for the $0.99.Ah, heck, I ordered the full CD that had the piece; have it on my hard disk, playing it now.Then for my $0.99, I complained, and Amazon took my word for the loss and refunded my $0.99!The piece is a lot of fun, e.g., is the Charles Laughton character thinking about the Maureen O’Hara characterhttps://upload.wikimedia.or…Now, why would the Charles Laughton character be thinking about the Maureen O’Hara character?Sure, now wildly politically incorrect, but, still, fun music!
Re your item (4): seeing that this was at WooConf, she was probably targeting her talk to that audience. But I also wonder if it’s possible that she’s found that her current customer is indeed the type of retailer who values e-commerce advice like this. (This isn’t the pitch she’d give at Launch or to a VC, obvs.)
There are actually chinks appearing in the Amazon shipping armor.For the Amazon drivers that deliver to my office in some cases theyliterally throw the package at the door and aren’t particularly courteous or even acknowledge you. They don’t present a good image for the company. From what I can tell they are private contractors.  Additionally I’ve noticed a few routing mistakes they have made in one case Amazon marked a business address package as residential and as a result it came to late and they marked it ‘no longer in business’.In other cases both Fedex and UPS got package delivery wrong because of mistakes on Amazon’s end.So I wrote a complaint and received a $15 credit per below screen grab. The entire purchase was barely $15 including shipping. https://uploads.disquscdn.c…… Employing what appears often to be seedy looking people for lack of a better way to put it.
I totally agree. It is going to be interesting. When you flog people in the warehouse nobody sees it. When you are really tough on people in HQ nobody cares.Now when you have those people in front of customers and they don’t give a shit? That counts.I know the Whole Food’s CEO’s they really believed in hiring and paying people so they would be happy. No different than WaWa.When they bought Zappos things changed drastically.The question is will enough people care versus price.People will say I want service, service and then go somewhere else over pennies.
Obviously the killer app reason people deal with Amazon is not anything that has to do with how nice the drivers are (despite my comment which seems to indicate it matters to me; I mean it does but I am not going elsewhere because of it. ). People care about getting the goods on time and getting what they think is not even the cheapest price but a ‘satisficed’ cheap price one where it doesn’t really pay to deal with door number two.This is not the same with Whole Foods. With Whole Foods, at least for me, the attitude of the employees what I have described as a few cuts above ‘supermarket grade’ makes a difference in why I shop there. Because I am interacting with a physical store and people. So I care about how nice I am treated and how the store looks and so on. At WaWa the employees are important but honestly the secret sauce is probably 70% they are where you want them to be, prices, quality and so on. (Not a luxury good like Whole Foods sort of is..)What is the key advantage of a business? It differs depending on the business.You know one of the things that I learned with real estate that I own and rent is that in the end you can be nice to tenants and do everything they want and when it’s time for them to move they move. Doesn’t matter if you are ‘a great landlord’ at least at the level I am at. Someone owning a large amount of units that can benefit from a good reputation sure it matters. In my case not large enough that word would ever get around. Wish I was. Wish it did. Well maybe in the case of the shared units it might matter. And sure in one case I have a tenant, a woman therapist, that I think will stay because I told her I would let her decorate and buy things for the shared waiting room to make it more feng shui because she wasn’t getting a warm feeling from the other tenants. (Really…she wants friends..) But that was after she told me she was probably going to move.  So once again by my other theory I have created a positive in her mind that made it harder for her to not consider staying.  I find all of this fun by the way it’s almost as if I am glad it works like this because it’s a game. And importantly I probed her extensively as to why so I could try to sell her on staying.
whole foods turnover is really substantial and there is a lot of myth floating around how good a place it is to work. especially in the last 3 years.turnover of buyers, team leaders, shipping dock folks is really high.i know this first hand.
Wow. What do you think the reason is?
They have been in flux and shifting stuff around for 4 years now as their profitability has dropped. And unless you are at a leadership level, you are basically a laborer doing an intersection of work that is amazingly boring but requires concentration.in the buyers which are the key of the stores turnover is over 50%
Good intel Arnold. Thanks. I have none near me. Zero. No Trader Joe’s either.But we have some of the first Aldi and Lidl stores in the U.S. in Middletown, DE.They are close.See my comments about price. People say they are willing to pay for people, but very few are.(My raised garden is kicking so much butt and my bees are doing so well I feel a little guilty because I give so much away at work and in the neighborhood, that I think I cut into the co-ops sales)
AgreeMy promise to myself is to get somewhere I can spend the summers and grow food and have some bees againAndNever be involved in any venture again where u r subject to platforms like distribution and while foodsArtisanal brands in those channels are just getting demolished and it will get worse for them
People say they are willing to pay for people, but very few are.Agree. At scale, if they were (‘people’), Whole Foods wouldn’t be selling itself to Amazon. While they still have a loyal customer base enough of the ‘cheddar’ was taken by others who got into the organic game.So sure when you have the market pretty much all to yourself you can have all of these great policies, employee treatment, values and so on. One the landscape changes much of that goes out the window.I am still a loyal customer because I am not a price sensitive customer. I go there because I like the product and I like the store and the experience. I don’t look at pricing. No way I will care if Walmart sells the same stuff cheaper or even ShopRite. But it doesn’t take much for a business to be thrown out of equilibrium  if it depends on a certain scale to operate. This is why I say that business is often all about satisfying and executing on ‘the low hanging fruit of opportunity’. This is also why once you see a business start to fail it’s like getting certain types of cancer. Sure there are miracles and miracle treatments and turnarounds but generally once the day has passed there is little that can be done. One of my examples is what would happen if WaWa had to stop selling cigarettes.
Total agreement. Retail is a brutal business.If you only make and sell your own product, that is different. That’s why I like this company. I got a great belt and wallet on Etsy. A great bag direct.
Tobacco accounted for 36 percent of total inside sales of $233 billion, followed by food service, 21.7 percent; nonalcoholic packaged beverages, 15 percent; snacks, 9.8 percent; and beer, 6.7 percent (including stores that do not sell beer).But prepared food generated nearly twice the profits as tobacco. Prepared food accounted for 35 percent of gross inside-sales profit while tobacco accounted for 18.5 percent.
But prepared food generated nearly twice the profits as tobacco.Tobacco brings people into the store who end up buying prepared food. That is why removing tobacco is a bigger problem than it even appears to be.Sometimes evaluating numbers can lead to the wrong conclusion. I loose money on one part of my business but having that business has led to profits in another area. In a big way actually.Another example is when I was in my first business and did also brokering. Running your own equipment gives you an advantage over someone who ‘is just a broker’. Also helped greatly when I sold the business. Without the machines it would have been perceived that there was less to sell. In a way it’s close to the psychology of people paying more for certain real estate locations typically. Like having your boat behind your house vs. across the street from your house. (Maybe not the best example).This is why I get annoyed and frustrated when I watch ‘The Profit’ with Marcus Lemonis (who I have done business with). As he appears on TV (and I don’t know if this is true otherwise) he seems to make decisions almost solely on numbers and margins and does not consider the soft factors that anyone running a small business has come in contact with and understands seat of the pants.You know I am getting frustrated with Whole Foods never stocking enough bagels that I like. Do you know how much I spend at Whole Foods because I am at the store to get a bagel in the morning? (I drive out of my way for that bagel but I also buy a great deal of other high margin things). Get rid of the bagel and I will shift my buying habits and they could loose me (or a large portion of my business).
We agree 100%I should have put that in my comment but I was rushing this morning.No different than why they sell gas so cheaply.
By the way I’ve also felt similar contrarian about corporate jets (and you have some experience here) being worth their value generally. They are viewed as a needless luxury (and maybe they are in cases when business is bad) but I see them as important and a great benefit to business. And I have never flown in one either but to me it’s just obvious the impact of having one if used properly can have.There are many things like that that have benefit but are hard to quantify with numbers so the professors or writers get it wrong.For example trappings of wealth and how that can help you do business. Or a membership in the right club. Doesn’t mean to spend your last dime on them but I hate when people think that frugal is just de facto the way to go.
Depends. If you have far flung operations and need to move several people yes, and go to multiple locations. For instance Whole Foods. I’d be shocked if they didn’t have several.If you have high end employees and want them to really aspire to the perks at the top and work their ass off to get it like Goldman yes.If not it will be viewed as an lavish expense that could have gone to salaries.
Do most pilots feel flying corporate jets is generally desirable to flying commercial carriers? I don’t mean flying the largest and most prestigious airplanes or flying commercial to the exotic locations. I mean vs. flying from PHL to ORD on a 200 seat airplane. I would think flying corporate higher end jets would be very desirable work for a pilot. (Even more so for the flight attendants..)
No, generally you get paid for the amount of people you haul.Lowest: Freight Dog, carrying freight except for UPS or FedexNext: Small JetNext PHL to ORDNext PHL to LHR
>The question is will enough people care versus price.>People will say I want service, service and then go somewhere else over pennies.Great points. Seen the same. You get what you (are willing to) pay for.”If you pay peanuts, you get monkeys” – where have I heard that before?
There is a great Dilbert cartoon where the boss tells Dilbert I want above average people but pay them below average wages. Dilbert says why would they work for below average wages?You can push things but only so far and you have to pay.UPS pushes their drivers hard. But they pay them a ton and don’t push them too hard. I’ve never met an unfriendly one, most are downright super friendly.But if Amazon is applying their warehouse mentality (I know people that have worked there and it is brutal) to the drivers then you are going to get really rude unhappy people. Of course they just throw the boxes, they have brutal goals that if they don’t meet they get fired. As a matter of fact they fire the bottom five percent every month as a motivational tool. Got a bad cold this month and couldn’t work as hard? Too bad, you’re gone.When you don’t have to encounter the people because it’s just a box with a smile on it (ironic) or it’s in a locker you can put it out of your mind. It’s easy to do, I do. I try not to. I see people in Home Depot looking at items and bringing them up on Amazon. HD will match the price but the thing is you can’t ask a person about something. Now most are clueless but at everyone you go to they have one or two experts that are decent (and they will call them for you)Nardelli’s replacement did a nice job of turning that around. He had beaten people down so badly that when you encountered them they would just point and not even talk. When you have nothing to lose and are in a bad mood why be nice?
Interesting points.>There is a great Dilbert cartoon where the boss tells Dilbert I want above average people but pay them below average wages. Dilbert says why would they work for below average wages?I read a variant of that a while ago, I think it was circulating on LinkedIn:CFO to CEO: What happens if we train our people, and they leave?CEO to CFO: What happens if we don’t (train them), and they stay?
Great quote. I had this question when we got acquired: You let each person go to one technical conference a year (they have to share what they learned) isn’t that a great chance for them to network and find a new job?Me: The way I look at it is a great way for them to network and find a new hire.I need to be the team people want to work for, not the team they want to leave.
We have a saying in the U.S. about our football. In college players choose the coach, in the pro’s coaches choose the players.The way you build true dynasties like the Alabama Crimson Tide is everybody wants to play for Nick Saban. Is he a nice guy? Hell no, look at him yelling. But he is always in the running. Does he care about his players?People like playing for the New England Patriots coach Bellicheck. Nice guy? Nope but does he care for his players? Yup,
Right. We don’t need yes-men or yes-coaches on our teams.
What people don’t understand is you don’t need to kiss employees asses. My job is to give a pat on the back, a kick in the ass, or to stay the hell out of the way.But you need to provide an environment where people can grow, and you need to not tolerate infighting. Sure we can get in the occasional tussle, but we better make up.
>What people don’t understand is you don’t need to kiss employees asses. My job is to give a pat on the back, a kick in the ass, or to stay the hell out of the way.Nicely put 🙂 and agree again (not a yes-man though :)> you need to not tolerate infighting.Seen it tolerated in some places, unfortunately, by some weak managers.
Amazon’s shipping costs are lower because of their distribution center strategies. When the inventory is as close to the customer as possible, and picking and packing are automated with robots, the variable cost of shipping is significantly optimized by the larger capex investments. This is why there is a 12% vs. 35% difference in shipping as % of total costs for Amazon vs. SMBs.I understand the Shippo value prop on visibility, tracking, and providing a one-stop shipping shop across multiple carriers. But it is hard to compete with Amazon on shipping costs without fundamentally rethinking the supply chain and investing in automation. Personalizing shipping costs by predicting price elasticity of customers is a viable strategy, but that is a data analytics play and not sure if Shippo is doing that. If they are, the messaging is not clear on that front.Can Shippo help SMBs be more “easy to do business with” by providing more convenient options for shipping? YES. But the story on lower costs is really not clear because they are not doing the things that will move the needle there.
Another shipping freebee story. I am a constant buyer of Spence Lox from Whole foods. I get the 4oz packages (because once opened not typically good on third day and each serving is 2oz). On two occasions recently they didn’t have 4oz only 8oz. The 4oz Spence was delayed because of a shipping problem. Both times, and without even asking, Whole Foods seafood person gave me the 8oz package.Not at the 4oz price. But for free. That is roughly $20 worth of smoked salmon.http://www.spenceltd.com/in…Unfortunately it is really difficult for a small business to compete with what a large and either well funded, or willing to take losses, large business is able to do. There just isn’t usually enough volume or margins to be able to give away merchandise or issue credits on a whim. Plus (and this is important) many times the owner is involved in the decision (not an employee where it doesn’t come out of their pocket). So it’s hard for someone who has a different mentality to begin with or suffers a loss themselves to be so generous. Even though it’s a classic good business move long term.
Interesting. I’ve heard stories somewhat like this about Nordstrom. Not sure if true or not, and also not sure whether they may have changed their policies after abuse of this practice by customers.
It depends on a host of factors which include the goals they are trying to achieve, profitability and so on. Sometimes you actually want a customer to take advantage of you because it builds loyalty when someone thinks they got away with something they didn’t deserve. Not always entirely bad. I bought a car from Porsche (told this one before) and the very next day called the dealer to say I didn’t like it. Dealer stalled me and finally said ‘never happened before sorry can’t take it back’ (had a few hundred miles on it). I took it up with Porsche NA and managed to get them to give me a credit for the money I lost when I took the car to another dealer and they got me what I wanted in exchange (which they had to have shipped in as it happens). Plus $1000 more for my trouble. I told them ‘you should thank me I am showing you how one of your dealers didn’t treat a repeat customer well’.  And they did. Pointed out that they had never done that before. I think it’s true but even if not true made me happy. After all how many people buy a car, don’t like it the next day, try to return it, fail, and then complain to the manufacturer that doesn’t even sell that many cars. With another Porsche a bad transmission they flew one in from Germany by Fedex at a cost of $15,000 literally overnight. And I am not Jay Leno either.Luxury good, luxury treatment generally. Especially for repeat customers. However when a shortage of deck chairs sure they start to stop things it’s every man for himself. Because they could have done what dealer 2 did. Story greatly condensed. Took building a case documenting the failings of the first dealer to convince them to make the situation right. That has always been the formula that has worked for me in the past.
Good story and useful info …
.What this effectively does is make any eCommerce company into Amazon’s shipping department for $0.05/package. That is a huge market.A very solid business gambit.With no cost to sign up, no cost to implement, and only $0.05/package, it is a steal.JLMwww.themusingsofthebigredca…
My respect to you Laura Behrens Wu. Sooo enviousness the passion intellect & timeline. So often about the founder/s put the footprint in two continents use perceptions.
My 2c:1) I like the company name Shippo.2) Laura’s talking came across as a touch too fast in the first part of the video (not timed how much of a part, just gut feel) (but this could be a personal preference on my part – although many people talk fast, and I do too sometimes). Might be better to go slightly slower.3) Agree with @SixgillBlog:disqus that her enthusiasm shows through and is good.4) Might want to look at the camera (and hence at the audience) a bit more of the time.HTH.
.Not getting any of the criticism.Great presentation. Totally sold me.Great presentation. Hard to find a flaw.Great deal. I cannot believe you can get this much service for $0.05/package with no sign up fee?Looks like a solid company to me. The CEO looks sharp and is articulate, smart, persuasive, and sunny.I looked at their website and sent it along to two eCommerce companies I know and work with.It’s 106F in ATX. Maybe I’m going soft?Keep crushing it Sheepo and Laura. [OK, so do I need to ‘splain this is a yoke?]Well played, Fred and USV.JLMwww.themusingsofthebigredca…
She makes me want to get into retail! Go, lady founder :-)Does Shippo target, say, Etsy sellers?
I have been rehabbing a place in the woods in Northern MN this summer. I know first hand that logistics of getting things from here to there are brutal. For example, we paid Ikea to ship our entire kitchen and some other stuff to the cabin. We showed them on a map where it was. They got it to St. Paul, but didn’t want to ship up north. I had to rent a truck and take it. Same with Home Depot. In the interest of time, I rented a trailer, loaded it and hauled it 10 hours up from Chicago. We did get a refrigerator shipped there, but it arrived all dented. To get an electric water heater, I am going to have to drive to Hibbing (and will genuflect at the boyhood home of Bob Dylan). For me, it has been the Summer of Schlep.
.On the other hand, you are in the north woods and nobody will be messing with y’all, right?JLMwww.themusingsofthebigredca…
In the 1980s and 90s, Alan Greenspan started watching cardboard as a leading economic indicator. Given my home and office recycling, I can only imagine shipping will continue to be revolutionized.
Laura definitely gets it that the e-commerce customer experience doesn’t end until your product is in their hands.I run a primarily e-commerce business shipping 500-1000 packages per month using ShipStation’s software linked with our shopify store and a second cloud offering for our wholesale orders. Hearing the comment that 35% of SMBs expenses are shipping costs, I immediately opened up QuickBooks and ran a calc on my shipping costs (carrier fees, shipping supplies, AND shipping labor) as a fraction of expenses and I came in at 18%. My shipping team rocks! That said, I’m always happy to make our team better.I loved the insights on free shipping logic shared by Laura, and would love to use their service/support their work, but the cost of switching from ShipStation feels high or at least very unknown.It would be an interesting sales “hack” for Shippo to be able to connect to my Shopify store, and tell me how much I would save (or not) using their bulk shipping rates vs my own, what my free shipping threshold or meta free shipping policy should be, etc.I’m always disappointed when these cloud companies have access to so much of my data, yet rarely have any valuable insights to share. I’d happily share that data with someone who would do something interesting with it!It seems like I could have Shippo live between ShipStation and the carriers, assuming that their rates are better than my negotiated ones (no way to readily tell).The next level problem for shipping transparency, particularly for US companies going international, is getting VAT and duties pre-paid by the customer so that navigating their local customs counter and getting hit with taxes after the fact doesn’t ruin their customer experience. Big opportunity here as well.
If you think about it Amazon essentially outsourced logistics to manufacturers that already had outsourced it to traditional retailers. Amazon just did it so much more efficiently. They did the same for cloud.Now if you have a unique proposition and can sell it then you don’t have to go through Amazon.