ShipSweet Attempts to Stick It to the FedEx-UPS Duopoly with Cheap Shipping for Small Business
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to make a dent in what Wiener paints as a dominating duopoly of FedEx and UPS, with the U.S. Postal Service thrown in for good measure. After all, small business are a highly dispersed, fragmented market.
ShipSweet says it’s targeting two spots to solve that problem:
—Integrating with providers of shipping software systems, sometimes known as the “shopping carts,” who also could get a chance to take a slice of the action.
—Partnering with retailers to build a network of package drop-off locations for retail clients (and any individuals who want to take advantage). Wiener and Leichtung didn’t have any details on that front, but looked like they wanted to say something exciting about a possible retail partnership.
ShipSweet certainly isn’t alone in trying to build a business out of software-driven efficiencies in the shipping business. Bellevue, WA-based Enroute Systems makes a Web-based software platform that helps businesses choose the cheapest and fastest delivery service for their packages. Open Mile, a startup with bases in Boston and Chicago, lets shipping companies bid on prospective freight loads and uses Web and mobile technologies to line things up. [An earlier version said OpenMile dealt with parcels rather than freight.]
ShipSweet is different because of its focus on concentrating shipping orders for small- and medium-sized businesses, Wiener said. That makes it a more active middleman and less like a matchmaker. That also sounds harder to pull off, of course—while it’s essentially an IT solution, there’s a lot of touch points at package collection, order processing and so forth.
The strength of ShipSweet lies in large part with the team it’s building, Wiener said. The company’s managers and advisers include veterans of Adobe, UPS, Amazon and the U.S. Postal Service—a variety of experience you’d need to tie together traditional retail, software-heavy routing systems, and blue-collar trucking companies.
ShipSweet is the first company to emerge from of the Seattle office of Venture Mechanics, Wiener’s startup incubator project. Wiener, who is listed ShipSweet’s founder and chief executive, says the startup is wrapping up a $1.5 million round of angel investment after about 20 months of being bankrolled through Venture Mechanics. Leichtung is the chief marketing officer.
I asked Wiener if there are any lessons he took from his experience at Earth Class Mail, the up-and-down digital mail startup that he led for five years until stepping down and being replaced by new CEO Sarah Carr. Earth Class Mail relocated to Oregon and was focusing on a reboot, according to this January update from The Oregonian.
While the Internet is killing off traditional mail, Wiener said, it is also enabling more e-commerce and a resulting rise in parcel traffic. He also said ShipSweet would be much less expensive to establish because it will need less brick-and-mortar infrastructure—he predicted it would take 5 percent of the money that was needed to build Earth Class Mail, and would be profitable in less than a year, as opposed to several years.
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