Californian startup Shyp has just launched a mobile service which consists of collecting items for shipping from your home, wrapping or boxing them and sending them off via the lowest cost reliable channel.
While receiving a parcelis usually a pleasant experience, most people generally see sending or returning a package as a tiresome chore. For most consumers the logistics of sending parcels has not changed for several decades, so sending a package still calls for the same tedious procedure – packing the item in a box, finding the most suitable delivery service and waiting in line at the local company’s drop-off point during what are often inconvenient opening hours. Now San Francisco startup Shyp has come up with a solution to this nuisance task, creating a mobile app designed to relieve customers of these first steps in the shipping chain. Customers wishing to make use of the Shyp service just need to do a few things on their smartphones – take a photo of the item(s) to be shipped, then use the app to enter their own address and the final delivery address, and specify the service level required. The startup has raised $2.1 million in seed funding from a group of investors which includes Homebrew Ventures and Sherpa Ventures plus a number of business angels such as Tim Ferris, Antonio J. Gracias and Daymond John. Following several months of testing in beta version, Shyp officially launched its serviceon 26 March for pickups from San Francisco addresses.
Taking the pain out of parcel deliveries
To use the Shyp shipping services, you just snap a photo with your smartphone of the object you wish to have delivered and enter information on where the item is to be picked up from and the final destination address. Then what the startup calls a Shyp Hero will come and pick the item(s) up from your home or business premises, take charge of wrapping/boxing and decide on the most appropriate postal/delivery service to use, depending on where the package is going, how soon it needs to get there, and the service level required. Shyp says it will always go with the lowest cost and highest reliability, given the specific requirements. Once the order has been processed, the app will inform the sender of the estimated arrival time at the final destination and also email him/her a tracking reference so that s/he can track the package’s whereabouts in real time. Shyp is charging just a $5 pickup fee per item, plus the cost of shipping via the traditional channels – the US Postal Service, UPS, FedEx, DHL or other. All packaging materials are included in the price, and the company promises to wrap items securely in order to avoid breakage. But in case anything does happen, the company is providing insurance of up to $1,000 per item.
The company’s business model is based on a volume strategy. Prices are moderate, and based on negotiating volume discounts with the postal/delivery companies. By transporting some hundreds of boxes per day, the company will be able to send each item at a reduced rate and is planning to turn a profit by charging the sender the standard rate. Given that Amazon is able to obtain a 90% discount from shippers, Shyp expects to make a 20-50% gross profit on each parcel pickup. Shyp co-founder and CEO Kevin Gibbon says that, in order to ensure a high quality service and build a loyal following among customers, he interviews applicants for the Shyp Heros team in person and runs strict background checks on them. In addition, the company fully insures each delivery, from pickup to final destination. Gibbon says that in the long term he would like to see Shyp ranked among the major players in parcel delivery.