YC-Backed ShipBob Helps Small Business Owners Avoid Post Office Purgatory
Unless you are a philatelist or have a strong tolerance for boredom, standing in post office lines is a pain. This is especially true if you have to do it over and over and over again for your job. ShipBob, a startup backed by Y Combinator, wants to help small business owners and online sellers with a service that not only takes items to the post office, but also handles packaging and tracking.
Before starting ShipBob, which is currently available in Chicago and plans to launch in San Francisco next, founders Dhruv Saxena and Divey Gulati ran a small e-commerce company called SnailMailPics, which meant they spent a lot of time preparing packages and waiting in the post office.
“Shipping was the most time consuming and completely manual process of the entire online transaction cycle,” says Saxena.
Sensing a business opportunity, the two stood outside post offices in downtown Chicago and surveyed over 500 people.
“The 30 seconds from the parking lot to the post office was our pitching ground,” says Saxena.
“We realized that people are willing to pay a small fee if someone packages and ships their items, and that is exactly what ShipBob does,” he adds. ShipBob’s services cost $5, which covers up to five packages, and can be ordered online or through iOS and Android apps. The startup promises to pick up items within 30 minutes.
Saxena says that each month, over 1.3 billion packages are sent in the U.S. He believes “a huge portion” of them will eventually be shipped using a service like ShipBob, citing a DHL study that found real-time services and “convenience logistics” will have a significant impact on the shipping and logistics industry over the next five years.
Part of the challenge of being a on-demand service startup is scaling up when there is so much manpower required. Like HomeJoy, a startup that offers relatively affordable housecleaning services, ShipBob uses a proprietary tech platform to automate its system and keep prices down. It tracks each package when it enters and leaves ShipBob’s warehouse.
The company keeps on top of tracking numbers by sending customers emails when their items are picked up and after they have shipped, with an invoice and tracking information. ShipBob’s platform integrates carriers like FedEx, UPS, USPS, and FedEx) to give customers real-time updates about where their package. Saxena says that all of ShipBob’s software was developed in-house during Y Combinator.
For pickups, ShipBob uses Uber and Lyft. The ShipBob employees who do item pickup and packaging are called “Ship Captains” and undergo a background check before they start working for the startup. They are paid for each pick-up that they complete.
The combination of ShipBob’s tech platform, use of car-calling apps, and Ship Captains has “enabled us to scale up very quickly as this infrastructure already exists in cities and we do not need to re-create it for every city we expand to,” says Saxena.