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Shyp Scales Back Fulfillment Service

Shyp is scaling back its pickup-and-packaging service and announced layoffs. CEO Kevin Gibbon explained in a blog post that Shyp is suspending operations in three of the four cities where it operates and will focus on achieving profitability in a single market – the San Francisco Bay Area. Among the lessons learned: “We would have built profitability in from the beginning. And shifted to serve business customers sooner.”

Gibbon’s blog post announcement follows:

Today we’re sharing with you an incredibly difficult decision we’ve made, which is to streamline our business and focus on achieving profitability in a single market, the San Francisco Bay Area. As a result, we’re suspending operations in Chicago, Los Angeles, and New York, and reducing headcount at headquarters. We believe these steps will allow us to prove our business model and set Shyp up for long-term success.

This decision was not made lightly. It impacts our employees, customers, and partners, and I know it will upset, disappoint, and inconvenience many of you. I offer my deepest apologies and want to provide some background on why we are scaling back.

Four years ago, we set out with an ambitious vision – to make shipping simple yet powerful for consumers and small businesses. From scratch, we created courier operations to ensure we would arrive at your doorstep within 20 minutes of a selected time. We designed an industry-first warehouse system so items – chandeliers, bikes, TVs – were expertly-packed with extremely low damage rates. And we’d find the right carrier at the best price to ship your item anywhere around the world. We’re proud of what we’ve built – a high-quality service that has garnered top awards, excellent customer reviews, and strong partnerships with eBay, Shopify, and our carrier partners.

We’ve learned a lot along the way. We expanded to new customer segments, entrepreneurs and small businesses, building out features like advanced scheduling and bulk upload. We streamlined courier and warehouse operations while maintaining quality. As a result, we made major movement on unit profitability and increased revenue per transaction by 150 percent.

Hundreds of thousands of you supported us and helped us grow the business – and for that we thank you.

Knowing what we know now, there’s no question we’d do some things differently. We would have built profitability in from the beginning. And shifted to serve business customers sooner. In a business that requires significant investment to grow physical operations across multiple cities, we would have focused on achieving success in one market before expanding into others. And while there are many things we could have done differently, it’s also become clear that the market for venture financing has changed and there is now a higher bar for profitability – one that we might have met had we made different decisions early on.

With that said, I’ve never felt more strongly that Shyp needs to exist in this world. I’ve seen the impact Shyp has had on our business customers – drastically reducing time spent on packaging and shipping, saving money, and helping them serve new global markets. We’re rolling out product features designed for high volume shippers, and will continue to build out valuable services that our customers need and want.

As of today, Thursday, July 20, we are no longer accepting new orders in Chicago, LA, and New York. Any items already handed over to us will be fully processed.

One of the most painful realities of this decision is the departure of so many of our amazing employees. They have given their hearts and souls to make Shyp what it is today. Words cannot express my gratitude for the sacrifices made. We’re committed to helping these employees by connecting them with recruiters and companies looking for talent. Please contact me at kevin@shyp.com if you have roles to fill.

For our customers in Chicago, Los Angeles, and New York, we thank you for the trust you placed in us. It’s been a pleasure serving you and I hope to have the opportunity to do so again in the future.

Root for us!

SOURCE: Shyp Blog Post

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.