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Did you read the whole article? The value proposition is more that the company will send a courier to your home and take an unwrapped item to its warehouse to

by 727374 12y ago

Did you read the whole article? The value proposition is more that the company will send a courier to your home and take an unwrapped item to its warehouse to wrap then ship. Fulfillment by amazon requires you to do the wrapping and shipping (to Amazon). With that said, they only charge a $5 fee for this service, which seems unsustainable.

avalaunch 12y ago
They also get a discount on shipping which they do not pass on to the consumer. As they scale that difference will become larger and larger. I think that's where they expect to get the bulk of their revenue.
Someone1234 12y ago
> With that said, they only charge a $5 fee for this service, which seems unsustainable. Yeah. I don't understand how that even pays the carrier (+fuel). Let alone the packaging and the actual shipping to the end user.
- avalaunch 12y ago
  They don't just charge 5 dollars. They also charge the cheapest retail shipping rate to the consumer. Meanwhile they pay a bulk discounted rate. They pocket the difference.
  - kevingibbon 12y ago
    yep.
JoshTriplett 12y ago
> With that said, they only charge a $5 fee for this service, which seems unsustainable. From the article: > Because it ships so many packages, Gibbon says Shyp gets significant discounts from the major carriers. This makes sense because pooling packages saves their drivers a bunch of trips. “It’s actually a lot cheaper for them to just go here,” Gibbon says. Meanwhile, he says Shyp charges customers the cheapest retail price they would pay to ship an item, which still ends up being more than what the company pays. Shyp keeps the difference. As for paying the couriers: if they can pick up several packages in one trip, that could add up to a decent hourly rate. Large items that result in fewer trips will produce a large shipping cost, out of which Shyp could pay the couriers, while small packages will produce many fees for the couriers.
kevingibbon 12y ago
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.
- graeme 12y ago
  I love that you're based around the idea of arbitrage. It's one of the forces of our age, but few notice it explicitly. I'm not sure Tim Ferriss ever used the word in the 4HWW, but it was the central idea I took from it. I'm not surprised he's an investor.

by 727374 12y ago

avalaunch 12y ago

They also get a discount on shipping which they do not pass on to the consumer. As they scale that difference will become larger and larger. I think that's where they expect to get the bulk of their revenue.

Someone1234 12y ago

> With that said, they only charge a $5 fee for this service, which seems unsustainable. Yeah. I don't understand how that even pays the carrier (+fuel). Let alone the packaging and the actual shipping to the end user.

avalaunch 12y ago
They don't just charge 5 dollars. They also charge the cheapest retail shipping rate to the consumer. Meanwhile they pay a bulk discounted rate. They pocket the difference.
- kevingibbon 12y ago
  yep.

JoshTriplett 12y ago

> With that said, they only charge a $5 fee for this service, which seems unsustainable. From the article: > Because it ships so many packages, Gibbon says Shyp gets significant discounts from the major carriers. This makes sense because pooling packages saves their drivers a bunch of trips. “It’s actually a lot cheaper for them to just go here,” Gibbon says. Meanwhile, he says Shyp charges customers the cheapest retail price they would pay to ship an item, which still ends up being more than what the company pays. Shyp keeps the difference. As for paying the couriers: if they can pick up several packages in one trip, that could add up to a decent hourly rate. Large items that result in fewer trips will produce a large shipping cost, out of which Shyp could pay the couriers, while small packages will produce many fees for the couriers.

kevingibbon 12y ago

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.

graeme 12y ago
I love that you're based around the idea of arbitrage. It's one of the forces of our age, but few notice it explicitly. I'm not sure Tim Ferriss ever used the word in the 4HWW, but it was the central idea I took from it. I'm not surprised he's an investor.