If you run a small ecommerce business or are a brick and mortar retailer that also sells online, you need to know about ShipBob, a “next generation” fulfillment service that provides Amazon-scale same-day delivery for orders placed in Chicago, New York City and Los Angeles. But more than that, the company offers shipping services for merchants and customers outside these metro areas, too.
Actually, ShipBob offers two services: a software platform that the company lets businesses use for free to manage orders, inventory and customer communication. On the back end, it provides physical logistics to warehouse inventory and fill orders.
“ShipBob is not an old-school logistics provider but a next generation fulfillment center,” said ShipBob co-founder Divey Gulati in a telephone interview with Small Business Trends. “We’re located close to end consumers and merchants in three metropolitan areas — Chicago, New York and Los Angeles — which lets us give Amazon Prime Now style same-day pickup and delivery services at a price small businesses can easily afford.”
How It Works
Merchants that do business in one of the metro areas ShipBob serves enter shipping orders into the software platform. A ShipBob agent (referred to as a “Ship Captain”) will then pick up the merchandise, take it to the warehouse, package the item, and mail it via the “most reliable carrier at the cheapest cost,” the company website says.
ShipBob’s platform integrates with eBay, Shopify, Amazon, Magento, Big Commerce, WooCommerce, ShipStation and Backerkit, to automate the shipping process. Integration with Volusion, Etsy and Squarespace is also on the drawing board.
Merchants not located in one of the three major metro areas ShipBob serves can ship inventory to any or all of ShipBob’s warehouses. And while the company primarily targets the three metro areas, it can send goods all over the globe, and often does.
As to pricing, ShipBob ships at the lowest rate possible, Gulati said. Pickup and warehousing fees are part of the mix, but the company requires no inventory or order minimums. Neither does it charge “pick and pack” or “per unit” fees.
It also provides standard packaging material free of charge. Merchants need not worry about long-term contracts either. All of ShipBob’s services are available on-demand.
How ShipBob Got Its Start
Gulati said the company got its start almost accidentally — quite literally by two guys (Gulati and the company co-founder Dhruv Saxena) walking into the post office to ship products they were selling via their own eCommerce shop and encountering others who were doing the same.
“My co-founder and I were selling photographs via an online store,” Gulati said. “When an order came in, we would rush to the post office to mail the item. We began to realize that we saw the same people doing the same thing every day.”
Gulati asked the other merchants if they would be willing to pay a certain amount to outsource shipping and received a positive response. From there, the idea for ShipBob was born.
Since Gulati and his co-founder were both software engineers, they began by developing the platform and built the logistics side of the business over time, starting in Chicago with daily pick-up and delivery, and then expanding to each of the coasts.
ShipBob’s Value Proposition
ShipBob bases its value proposition on the premise that, by selling on Amazon, smaller merchants aren’t controlling their brand.
“Consumers search Amazon to find the lowest price,” Gulati said. “They don’t know who you are or what your value proposition is. In that sense, Amazon has commoditized eCommerce.”
Instead, ShipBob gives businesses an opportunity to sell on property they own — their website — where they can control the branding, target their marketing and improve the customer experience, and still receive Amazon-level logistics and shipping.
“We’re democratizing what Amazon has done for their sellers by giving the same logistics capabilities to everyone else,” Gulati said. “We help small eCommerce businesses build a brand for themselves.”
Plans for the Future
Gulati said that, initially, plans are to focus expansion to larger metro areas. Eventually, the company will establish a distribution network across the country that, not unlike Amazon, brings goods closer to the end consumer and merchant alike.
“That way, we can reach customers in one or two days without charging sellers expensive overnight shipping rates,” he said.
Currently, ShipBob serves 1,600 small businesses, some of which just use the software for management purposes. It has grown from working mainly with mom and pop businesses to where, currently, the median-sized customer ships an average of 100 orders per month.
For more information or to try the service, visit the ShipBob website.