This holiday season is breaking records for online sales, and nobody is selling more online than Amazon.com. But how does your ecommerce site get its share of holiday sales? Kevin Gibbon, co-founder and CEO of Shyp — a provider of parcel pickup, packaging, and shipping for SMBs — says that small businesses best opportunities, how to compete with Amazon and its peers, is by focusing on delivering unique customer experiences along with those holiday packages.
Below is an edited transcript of our conversation. To hear the full conversation, click on the embedded player below.
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Small Business Trends: Why don’t you give me a little bit of your personal background, and about Shyp.
Kevin Gibbon: I’m an engineer by trade and an entrepreneur all my life. I’ve had a few startups. I was an Ebay power seller. I would buy items for a low-price point and resell them on eBay. It turned into a pretty big business. But one of the biggest headaches was actually the shipping an fulfillment side of it; really scaling that side of the business up.
That pain point stuck with me for many years and I decided to start Shyp. And it’s interesting because we didn’t start to solve the pain point that I had as an eBay power seller; I was doing quite a bit of volume. But when I looked at the entire industry and customers, I decided to go after the consumer shipping market. And the reason was because it is the most under served piece of the market. It is of course very infrequent; People probably ship personally or four times a year if you’re lucky. But it gave us an opportunity to break through some of the noise and take a task that people do very infrequently, that takes one to two hours, and turn that into minutes.
We started with a pickup and packaging on demand service. We would come to you. We pick up your items we would professionally package them. We would have a warehouse every single market we operate in and then we would ship them out through the typical national shipment carriers like UPS and FedEx. And we call that the first mile shipping; removing the biggest pain points like a pick up or drop off and packaging piece.
We now we have a business product and an offering and are really trying to help small businesses with one of the biggest friction points of having a small business. The problem with selling online is the shipping piece. Today we’re in four markets; San Francisco, New York, LA. and Chicago. And we also have a digital product as well that’s available nationwide that’s a little bit different. But we’re just trying to solve that hard part, I think, of operating small business.
Small Business Trends: Do you compete head to head with FBA (Fulfillment by Amazon)? Or is it more complementary.
Kevin Gibbon: I’d say that we’re a good service today for really small businesses. And businesses who are just getting started and doing all the shipping themselves which you typically do when you start a business. And companies not quite in the FBA volume yet.
If you’re doing less than a thousand transactions a month we find that’s kind of our sweet spot today. And over time we’ll figure out how we could potentially serve a larger customer but that’s where we’re finding the most traction today.
Small Business Trends: Since you deal with lower end of the SMB space tell us how you see these folks doing in this current holiday season compared to last year this time.
Kevin Gibbon: It seems like the Amazons of the world are really on a roll. They are growing more. Consumers are going to them to purchase the majority of their goods; and year over year the numbers are getting even higher.
I think it is quite difficult for small business to rip through the noise and create that loyal fan base. But we’re seeing a lot of our customers doing things to allow their customers to build the kind of relationships with them that they can’t build with Amazon – with really amazing customer support.
Small Business Trends: What are some of the things that your customers are doing to find success in this competition particularly at this of year?
Kevin Gibbon: Whatever you can do to deliver your product to your customers as quickly as possible. We even see some of our customers that will do local delivery in the cities that they operate in because they have to compete in a lot of U.S. cities that Amazon has their Prime Now service. Which is the one to two-hour delivery window. And so just trying to go above and beyond to get products to your customers as quickly as possible.
Free shipping if your business can withstand that. I think having a free return model is something you need to have to compete with the Amazons of the world.
We see a lot of our customers that will e-mail their customers and create a conversation just off of a purchase alone. Or a handwritten note in the actual box itself.
They’re doing things to create more of a personal connection and create that fan base that’s going to be your core base of supporters; that are hopefully going to tell more people and get you more customers.
Small Business Trends: How can small businesses get a piece of that conversational commerce market? Companies like Amazon with the Echo are leading the way allowing you to able to talk to a device and tell it to order you something without you having to swipe, click or do any kind of typing.
Kevin Gibbon: I think you should innovate on whatever is different about your product or your company, and outsource or use other resources to achieve best practices. Using platforms like Shopify which, I think for small businesses, is looking to be one of the leaders in that space. And to get a website up that you can start directing traffic to and has a lot of these things that they’ve (Spotify) spent a lot of time thinking about; the conversion on that Web site, thinking about having Apple Pay integration.
They have an integration to Facebook Messenger to start some of that conversation from the customer experience side of things. I think when you can go to a platform like that, that has a lot of the things figured out, then you have a leg up and you’re then you’re able to focus on the rest of the business.
Small Business Trends: How big of an impact does not being able to quickly get a product from point A to point B make? How does that impact the potential success that small business is going to have in. And how do they use that ability to get things delivered as a marketing opportunity against Amazon or any other kind of competition that they face.
Kevin Gibbon: On the shipping side I think you need to be as quick as possible. That really helps with repeat customers. How do you earn them telling other people about you? And I think the delivery speed and the quality on the unboxing helps. And using companies like ourselves that think a lot about how to get our customers’ items there quickly, and for a good price point, so they can spend more money on the other pieces of business.
It can seem quite simple but there’s a lot of things we do that takes a lot of time, and I think the small business should be spending time on the things that do matter for your business versus the more of the mundane thing that companies like us or Shopify spend all of our time thinking about.
Small Business Trends: We know that price is important. But this whole idea of customer experience. What do you need to do from a standpoint of making that box special when it’s opened by the consumer? How important is that to building the customer relationship and extending the engagement opportunity?
Kevin Gibbon: I think it’s hard to know and it’s very specific to your business. It depends on what brand you’re trying to create. And that will dictate how important that piece of the entire experience is. But it isn’t that difficult and it’s not that costly if you do spend the time on it. Especially if you are ordering in bulk; there’s a ton of these box manufacturers that you’re able to get some good prices on and the quality can be quite high.
I think that’s how you compete against the Amazons of the world. You think about that experience that you receive from Amazon. It’s kind of vanilla. And that’s how you potentially compete.
Some of the things that our customers can do is we use multi carrier so we’ll get our customers the best rates and can make a big difference for businesses; just that piece alone. There are a number of other things that we’re working on. But we want to do what we can to get our customers’ goods there faster and cheaper than they could themselves. And we’ll continue iterating on that. And so our customers can offer it free shipping and free returns and everything that they really do need to compete with the Amazons of the world.
This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.
Brent: It is interesting to see how a startup could take a small piece – but very important – of the supply chain, and make it into new business with a quirky name, Shyp.