Meet the Startup Going Up Against Amazon in the Shipping Wars
Small businesses may never be able to match Amazon’s volume. But this startup is helping them get a leg up.
PHOTO CREDIT: Getty Images
Editor's Note: Inc.'s 12th annual 30 Under 30 list features the young founders taking on some of the world's biggest challenges. Here, meet Shippo.
Like many entrepreneurs, Laura Behrens Wu started a business to solve a problem she herself faced--just not right away.
In 2013, when Wu--a German graduate student and tech worker living in San Francisco--launched her online store, selling sustainable handbags, the whole process was relatively seamless. She used Shopify to process her sales and used Stripe for processing payments. The only problem was, her trips to the post office were becoming increasingly frequent and, as such, a major time suck.
"We were making two to three trips to the post office a day," says Wu, 25, who figured she wasn't the only one feeling the pain. "In e-commerce, shipping is such a cost factor and customers expect a fast turnaround with low costs," she says. "So we started to look into the inefficiencies of shipping." That same year, she abandoned her e-commerce shop and by February Shippo, which she co-founded with Simon Kreuz, 28, was in business.
Shippo allows customers to compare prices, routes, and shipping times between private carriers like UPS and FedEx and others so they can get their products out to customers--fast. Today, more than 10,000 customers use the company's API to do everything from purchase shipping services to print labels directly, rather than tediously uploading customer and order data to a carrier's website.
"Shippo only does one thing for us--give us shipping rates and labels--and it does it well," says Matthew Berk, the founder of Seattle's Bean Box, a subscription coffee service. "This means we can keep our head in the product and evolve it quickly."
Shippo has grown along with its client list. Since the end of 2016, it added 15 more staffers, putting the company's total headcount now at 60. (The company declined to submit annual revenue figures.)
Of course, Shippo has a very big potential competitor in the form of Amazon.com. While the Seattle-based e-commerce giant utilizes legions of individual sellers and retailers to fuel its massive consumer-products machine, the company currently handles its own in-house shipping. It also offers fulfillment services to private Amazon sellers. And while the company hasn't set its sights on facilitating non-Amazon sellers' logistical needs at present, it doesn't mean it won't in the future.
Amazon can already pad fluctuations in shipping costs--like fuel prices--with sheer volume, says Michael Olsen, an e-commerce analyst at Piper Jaffray. He estimates the company will sell 9.2 billion items this year. "Given the volume they have and massive existing customer base," he says, "Amazon can shoulder any sort of changes that create a higher burden for shipping easier than smaller companies."
Wu isn't flinching, however. Her plan is to keep growing Shippo and focus on that. Currently, Shippo can be used to ship anywhere in the United States, as well as Canada, the United Kingdom, Germany, France, and Australia, with plans to continue expanding into Europe.
"Shipping providers know that their strength is not in the technology," says Wu. "We're building better tech for them to allow more people to access the services we need."