It has been almost a year since my initial blog regarding C2X package company Shyp, and since that time, much has changed.
Whilst still operating in only four US cities, Shyp has rolled out address-free shipping, undergone a rebranding, and has avoided a contentious legal position by hiring all of its contractors as full company employees.
The most eye-catching of the company’s moves however, has been last week’s announcement that Shyp has been providing an integrated pick-up service in partnership with eBay since December.
The agreement allows eBay users to connect their accounts with the Shyp app, with an itemised list of recently sold goods appearing automatically. By selecting the option to pack and send with Shyp, users can effortlessly resolve the delivery of their items within 20 minutes of instruction; as described previously, Shyp will take it from there.
Apart from the obvious material and promotional benefits of the eBay deal, the agreement also holds symbolic significance; it was the monotonous and time-consuming process of packing and shipping goods sold on eBay that prompted Shyp CEO Kevin Gibbon to start the company.
e-commerce is at the centre of what the company does, but unlike other logistics start-ups attempting to solve the tricky last-mile of delivery, Shyp is attacking an entirely separate niche. In the words of John Doerr, “It’s the leader in reimagining the first mile, not the last mile”.
By streamlining the shipping process for small sellers, Shyp is making it easier for individuals to tap into the growing worldwide e-commerce boom. Evidence of this comes from the company’s findings during its initial trial with eBay. According to Shyp, half of all sellers utilising the integration had never sold on eBay before. Moreover, an even greater number reportedly used the service again, after their initial experience. Shyp is currently operating free of charge on all eBay shipments until June 30, which is also undoubtedly incentivising the uptake.
With a returns service already provided through the Shyp app, Gibbon has suggested that additional services, such as confirming that sold items are ‘as advertised’ represent a future possibility. The critical issue for the company is economies of scale; Shyp operates a number of its own warehouses and therefore requires a minimum number of packages in order to operate sustainably. The company has been very cautious in evaluating expansion options due to these requirements, and whilst it has become highly successful in Los Angeles, Shyp was forced to withdraw from Miami.
One point of concern for the business is that venture capitalists are likely to be much more parsimonious this year, following the overvaluation of several businesses in the on demand tech space. In order to gain traction with investors in 2016, it is imperative that Shyp becomes profitable, a fact not lost on Kevin Gibbon and his team. Shyp aims to move into the black by reducing costs and raising prices in several areas outside of the eBay partnership.
Nonetheless, Shyp will be anticipating a significant ramp-up in demand thanks to eBay, and it may well be that the partnership provides the big push to get Shyp going in a greater number of markets.
Should this come to pass, the company will have truly come full circle.
Source: Transport Intelligence, 22nd March
Author: Alex Le Roy
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)