Shyp Goes Nationwide By Letting You Comparison-Shop Shipping Services
Shyp, the San Francisco startup that aims to make shipping easy, will let you use your smartphone to summon a courier to your door. If you want, it will even pack your stuff for you. But the company, which launched in 2013, has been in no hurry to expand. It still only has couriers and warehouses in Chicago, Los Angeles, New York, and San Francisco.
But as of today, there is an aspect of its service that’s now available throughout the U.S. You have to pack your items and take them to Fedex, UPS, or the post office, which at first blush might sound like you’re doing all the work that would otherwise be done by Shyp. But before you do, you can see all the service offerings from Fedex, UPS, and the USPS and choose the cheapest one that will deliver your package on time. You then pay for shipping and print a label using Shyp’s mobile app or web interface.
Shyp compares this service to travel price engines such as Kayak. The company built it by creating a public-facing version of the pricing tool it uses to select delivery services in its four full-service areas. Using it could save a substantial amount of money: On average, the company says, people who use Shyp pay 30% less than what they would have paid if they’d not done any price research. (After a customer’s first 90 days, Shyp will add a per-label fee of 50¢ to the shipping cost, with volume discounts.)
“There’s this perception that USPS has the cheapest cost, which is not the case at all,” says Shyp cofounder and CEO Kevin Gibbon, who notes that the post office is optimized for getting small packages to any address in the U.S. via small delivery trucks, not handling bigger and bulkier boxes. “Roughly speaking, for anything over three pounds, you’re leaving money on the table if you go to USPS.” UPS is often more economical—but then again, Fedex’s ground service is aggressively priced. With a few clicks, Shyp’s new service will let you see what your best option is for any particular shipment.
Shyp decided to roll out the nationwide pricing service after introducing shipping for eBay sellers in late 2015, a move that broadened its base beyond consumers by introducing its service to a lot of small businesses involved in e-commerce. It turned out that many of them were happy to handle much of the fulfillment process themselves, but Shyp’s ability to save them money on shipping costs was appealing. The company has deep discounts with the big shipping firms and has a loyalty program with price breaks for frequent customers, making its pricing “as good or better than you’d be able to negotiate with these carriers yourself,” says Gibbon.
The emphasis on catering to the needs of business customers who ship in bulk is part of Shyp’s effort to reach profitability sooner rather than later, a strategy that has also led to tweaks such as additional fees for packing, a service that was originally rolled into the overall price. “We did lose some customers in the process,” Gibbon acknowledges. “But the health of the business has never been better.”
And what about bringing the full Shyp experience to more cities? Gibbon says that the nationwide price-comparison service will help the company learn about large quantities of customers across the country, thereby letting it make smarter decisions about its future.
“This is a really, really tough business to run, and we’ve done a lot of the hard parts,” he explains. “When we do expand, we want to be aggressive. It’s not going to be one or two markets, it’s going to be a massive expansion.”