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.
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.
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!
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.
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?
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.
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?
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.
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?
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.
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...
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.
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.
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!
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)
See my previous answer [1], obviously it's impossible to compete directly with Google and especially not at this price point. Our goal is to return a geo coordinate that is at least on the correct block and as close to the street number as possible.
I think your missing the point. You are calculating this on the basis that you were buying and using your car exclusively for Lyft. If a driver is already paying for a vehicle, all of these expenses can be shared with personal use. This is the 'sharing economy'.
To buy a car and use it exclusively for Lyft may not make sense.
