How to Optimize Your Shipping Operations | #199: Joe DiSorbo

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Claus Lauter: Hello. Welcome to another episode of the E-Commerce Coffee Break podcast. Today we wanna revisit a topic that we had in the past. We want to talk about shipping. Obviously shipping is a very important topic for every merchant because you need to get your products to your customer. Now with shipping, there is also a huge Opportunity there to save money and to straighten your workflow, and just to save time on the whole thing, which, and then also will save you money. So, to dive a little bit deeper into the topic on how you can spend. Less time on shipping and save money there. I have Joe DiSorbo with me. He is the founder of ship.com.

He is a self-made tech entrepreneur, passionate about macroeconomics and empowering small businesses. He previously founded Logistics Corporation and was acquired by Rakuten in 2013. He now focuses on ship.com app platform and labeling small business to compete with larger online retailers. So let's find out what that is about.

Hi Joe, how are you today? I'm

Joe DiSorbo: great. Thanks for

Claus Lauter: having me. Joe, you have a bit of a longer history already when it comes to running businesses, when it comes to , managing, shipping and so on, so forth. What got you into this part of

Joe DiSorbo: business? I've been in e-commerce for a long time. I was in 1998.

I was back in Silicon Valley doing startups, and actually prior to that I actually lived in Korea. I was a operations manager for US multinational, and that company had a lot of, distributors that were small business owners. I got a lot of experience dealing with small business owners.

I got a lot of experience with logistics. I ran accounting, logistics, software, the whole operational side of the business. But I decided to be an entrepreneur. So I moved to Silicon Valley in 98 and I started various software companies. Some of 'em worked out, some of 'em didn't. I decided that the one thing that e-commerce needed, and this is way back, this is when Jeff Bezos was selling books and PayPal was just down the street from my house just starting out.

I'm sure you remember back in the Glory days of Silicon Valley in 1998. It went on. I started a company called Student Planet, which I sold, and then I got into e-commerce logistics through the company I started called Web Logistics. E-commerce was growing rapidly back then, and part of the issue was getting the product to the customer.

And so I thought it'd be a great business to go into. And so I started Web Logistics in 2001. I subsequently, moved to Singapore and ran it from Asia for 10 years. And we primarily located in the United States, and it started out as a software company. But then we started growing and we realized that , traditional logistics just couldn't handle what e-commerce did.

And primarily, you had to ship the packages quickly , and accurately. And we actually outsourced our, , fulfillment originally we're just a software company facilitating transactions. So we would integrate , into platforms, and we would consolidate, shipments and then help people, with their logistics.

We had a company that would ship them out. And one day we had a bunch of orders and I called this person New Jersey, who's running the warehouse, this old crusty warehouse manager. And I said, Hey, you know we have like a hundred orders, you need to ship them today. And he was like, son, lemme tell you how logistics works.

We'll get to it when we get to it, And so I said you don't understand how eCommerce works. We need to ship this today. And so that led us to open, start opening our own warehouses. We couldn't outsource to the old school logistics guys, so we started opening warehouses and, we grew and grew and we had one in western New York.

We ended up in Vegas, in Scranton, Pennsylvania, and Austin. And we ended up a lot of, e-commerce, warehouses and a lot of companies. And partly what we were doing is we were trying to help small and medium size e-commerce businesses compete with Amazon, cuz Amazon was rolling out the two day delivery model back then.

And companies could not compete with that. So we devised a software solution plus a logistics solution that would allow these companies to ship two days, basically anywhere in the United States ground if they put their warehouses in the right or put their, inventory in the right warehouse, in the right locations.

That went along pretty well and it, the company got fairly large and we exited and as you said, in 2013 , to Raan in Japan. And I exited the company in 16. But I had a huge love for the small business owners. As logistics grew, we started focusing on the larger companies because the smaller companies , were hard to do business with it's startups.

You know, how's start companies. It's very difficult when you have a small business. And we were generating about 5,000 leads a year, primarily through Google AdWords and other online advertising. But only 500 of those met the model of outsource logistics. The other 4,500 ish leads.

We had to discard because we couldn't really service these small businesses. So I saw this huge market of companies that needed our service. , but they needed to do it themselves, but they needed the software to facilitate that transaction. So in 2016 a few years later I took some time off.

Starting a company running it and selling it as it's a taxing endeavor. And then a couple years later, 1819, I'd started ship.com. With the goal of helping these small businesses with their logistics, cuz they're really shipping it themselves we need to figure out a way to save them time, save them money, and make it easy for them to do business.

And we've grown quite a bit and we actually have a lot of Shopify customers that use our service and so it's just a great thing to be able to help these small businesses, , save time, save money, and achieve their dreams. Really what we're doing is trying to help these people achieve their dreams.

Claus Lauter: So we have two digital dinosaurs on the show I'm doing online stuff also like the mid nineties. So for ages , probably the two of us are older than most of the business here. Amazing story there, the way that you working digital, focusing on small and on medium business to helped them obviously Shopify and other platforms in the last couple of years, made it very easy for merchants to go online to open their online stores.

And now, as you said, shipping the most important part there. , When it comes to shipping, what are the most common challenges, mistakes, errors that you see that merchants do when it comes to do it proper?

Joe DiSorbo: When they start out, they don't realize, you know what it takes to actually fulfill orders.

And so they're using the wrong materials. They're paying too high prices for shipping, and they spend too much time on data entry tracking. And those kind of, things that are, make it hard to run a business because if you're running a small business, think about the demands on just say an e-commerce retailer selling clothing.

They have to source the clothing. They have to receive it. They have to take the pictures, put it up, they have to market it, they gotta drive tractor of their site, credit card payments, they gotta manage cash. All these things. And then the last thing after they actually finally make a sale is they have to ship it.

And so then they get to that point and they're like, well, what am I gonna do? And a lot of 'em, they start out small obviously, and they probably use recycled boxes from Amazon and they , put the thing in there and they can't figure how to. Ship it and they take it to the post office, or they take it to UPS store it's taking them a lot of time, a lot of effort, and a lot of money.

As they get bigger, a little bigger, they say, man, I can't keep doing this because I really need to focus on my sales and marketing and driving traffic. And so we come in and we show them, Hey, you can integrate a solution with Shopify and all this data will flow into a system where you can just, do three clicks.

And basically ship a package and they can even come to your house and pick it up. And so they run into these challenges it's an exciting endeavor and all the work up front finally flows down into shipping, and then they have to become a shipping expert on top of it. It's the kind of part of the business that people probably don't consider and don't wanna deal with when they're very small.

As they get bigger, obviously if you're in e-commerce, you have to ship packages. , that's another reason I like being this part of the business because it's required by these businesses and so it really can help them.

Claus Lauter: A lot of merchants obviously then become very overwhelmed by the pure amount of different shipping options that are out there.

If you're looking in u p s and all the others, they have like a ton of different variations just to get the product to your customer. And I understand that your solution helps with that. Tell me a little bit about that.

Joe DiSorbo: We've partnered with, in the US with U P S and US Postal Service and when you put in the information, it could go two ways.

Flat rate shipping, which is very easy, right? You have a flat rate shipping box. And so if you're using that method and you're using our system, it'll just come up automatically. It'll know. Cause there's no weight considerations or dimensions. Those are straightforward. But you're right, if you're comparing like priority male.

In the US versus US Postal or US Postal versus, u p s, there's a lot of options. Now. Most people will ship the cheapest option. Sometimes the customer wants it overnight. , and so we've sorted our data and we're monitoring the data in your account to make sure that we're presenting you with the best low cost shipping options available.

And so it speeds up the time and it makes it easier for you to choose. And we also have a lot of information on our site that helps people make those decisions as well.

Claus Lauter: Is said, packing is one part. You said they're using the wrong packing, the wrong standard sizes and all of that.

Gimme some tips on, , how people can spend less time on shipping just to straighten the process. To make it easier to fulfill to the order.

Joe DiSorbo: If you're using Shopify, you should be using, a shipping solution such as ours or another one that brings your data directly into the shipping system.

Because if you don't do that, you're gonna have to double data entry everything. So you take it from Shopify and you print out an order, you pick it, you pack it, then you have to enter the data into, say the u p s system or the US Postal Service system. That's a very time consuming, there's a potential for errors.

You don't necessarily get the data incorrectly it takes a lot of time to do that individually. If you're using a system such as ours or another similar solution, the data, all the shipping data shows up in there, all the order data shows up in there ready for you to ship. So that saves you,

that's the first step to saving a lot of time. the other things are the system will send out tracking information. You can monitor the shipments. Our system specifically has a email communication tool that allows you to communicate with the customer during the shipment. You really don't have to have multiple platforms, to do all these different tasks.

You really only need Shopify plus a shipping platform now, and you don't have to go back and forth. In addition to that, the platforms are such as ours, send tracking data and the shipment data back into Shopify, and so once it's shipped, you can see that data back in the Shopify system.

It's really easy to manage the business when you have , a Ute shipping solution versus not. With materials specifically, I think people don't understand that the more it weighs and the bigger the box, the higher the cost, It's incumbent upon, upon the shipper two to try to keep those costs down.

You can screw around with our tool that shows you, estimated shipping costs to see what the differences are based on what kind of materials you use. As you can become a more mature business, I think you figure these things out. But when you're just starting out, like you might use the wrong size boxes, you might put too much packing material in the box, and we see that a lot.

We say, how do you want, how can you cut your shipping costs? We say, well, what kind of materials are you using? And then we drill down on that. If we can figure out what they're using versus what the optimal is, then we can save 'em some money there too.

Claus Lauter: Makes perfect sense. Now our merchant is happy to get it out of the door, getting it to the customer and then it gets stolen. That's unfortunately something that happens quite often. Gimme a couple of tips there. What's the best way to endure the package? What's the process? What can you do to make that not happen?

Joe DiSorbo: With the US Postal Service, it's a little difficult, but with u p s it's quite easy. So in US Postal, it gets stolen. you can file a claim and we help our customers file these claims get it returned. With u p s, it's much simpler. You have insurance up to a hundred dollars, I believe included.

And we actually ensure, we personally ensure the U S P S packages for the customer. Up to, I think a hundred dollars as well. And we reimburse them. if something happens, it gets damaged, stolen. And I don't think many companies do that, actually. So I think that's , an advantage for us that , we not only file the claims and help them recover the money, but we also ensure the package is gonna get there.

If you don't have a provider such as ours and you have to deal u p s and US Postal directly, it can be another huge time consumer. And it's frustrating. It's a little frustrating for us, but we do it so much, we're good at it. So that's a skill.

I don't think many, small business owners, medium size e-commerce businesses really wanna have to acquire when they can use a company like ours to, to do it for them. Insurance is a, a big thing, but we don't really see that many lost packages or stolen packages.

And we're shipping millions of packages a year through our system. And I have to say it's quite low. It's quite low. Around the holidays it goes up. As people know that people are buying more online and they're looking out for it. But, that'd be Christmas mostly, but basically, it's actually quite low.

Claus Lauter: Now are you competing with Amazon was overnight chipping and Amazon Prime when you are a small merchant, Obviously you wanna get your package as quick as possible to your customer. What are the best examples on how to make that work so that is still profitable for the merchant?

Joe DiSorbo: Unfortunately Amazon has built a great system and it's hard for small businesses to compete with delivery times.

The delivery time basically depends on where the package starts. In the United States. So if you're in Florida, it's gonna take a long time to get to California. If you're in Dallas, it's, it's pretty equidistant to the rest of the country. The best you can hope for, close people will get it in a day.

One of the reasons we had warehouses on the west coast and the east coast was to make it all two days. most companies don't have the luxury of having multiple warehouses. And so the delivery time is dependent on your location and it's anywhere from two to five days.

I think people are pretty okay with that at this point. Now, Amazon's even moving away from the two day delivery model? Slowly. But even where I am, I don't actually get everything in two days anymore with Prime. So they're seeing the cost is really high. I would just encourage people to, use the lowest cost method, whether that's first class mail, priority mail, or up s ground.

If the customer really wants it, you have to charge them for overnight shipping, which is fine. It's easy. But , it's quite costly.

Claus Lauter: No, my perks of sense. Now, you build up ship.com obviously with the experience that you got all in this 25 years of being online and doing other businesses, and I understand ship.com does not only do, the order, the sending out desks, there's other features that you offer.

Tell me a little bit about more about that.

Joe DiSorbo: for small, obviously we do the shipping, focus a lot on that because we want it to minimize the number of clicks it takes to ship. If you're integrated with Shopify, you can ship an order in three clicks, which is really easy.

, but we also built some other tools for the customer. We have a loyalty tool. These are simple tools for small business. So we have a loyalty tool. You can track your customer's purchases and you can, give them rewards based , on their purchases and when they purchase. We have a loyalty build them, loyalty system built in.

And we also have the email communication tool that allows you to send, I would say, basic emails. you can set up a system where, you can communicate with the customer with like basic marketing emails and I watched some of your videos on loyalty and also email marketing, so I encourage everybody to go watch those cuz those are very good videos on it.

Our system is for simple, small business. As business get larger. They want more sophisticated tools, but this really helps these small businesses stay on one platform. Again, they don't have to go to other platforms and pay another, fee every month to get these services. They can just try it out it will serve them well for until their business grows.

And as their business gets bigger, exactly where that would be for each company, but at some point they might wanna, get a more sophisticated solution. But it certainly helps them get started with shipping and loyalty and email marketing. Okay.

Claus Lauter: Find out more about, or before we start finding out more about the pricing, what are the cost savings that you can achieve with your app?

Joe DiSorbo: On u p s, it's fairly large, so it depends on where it's going, what it weighs, and all these different things. But off of going to the u p s store, it's like 80% discount. I think it's 84 is the maximum. Some of it's 20, 30, 40, depends on the type of service, depends on where it's going, but it's significantly lower.

Than you're ever gonna get trying to do it on your own. Even negotiating with u p s directly, we are one of a select few companies in the United States that's part of the u p s digital Access program that guarantees us the lowest rates. We are not allowed to mark those rates up. We have to pass those rates along at what u p s sets and they've set 'em quite low there's not that many companies that have that.

Then on the US Postal Service side, they're setting the price, we're buying the postage at commercial plus pricing. And the average consumer, a small business isn't gonna get that. As you get larger, you may be able to do that, but then you have to manage the relationships with u P s and you have to manage relationships with postal service.

takes you more time. So with us, you can save significantly, on the shipping cost and I'd be hard pressed to say you're gonna find it cheaper anywhere else. This

Claus Lauter: is a huge benefit for a merchant, as I said, a huge benefit. It's a huge benefit.

You're saving a ton of money on the shipping. And then with your app, as you said, it's only three clicks and, you're done with it. Label gets print out and somebody comes and fetches and, , the order goes out, out of the door. What's your pricing structure? How do you charge the merchant?

Joe DiSorbo: We have three pricing tiers.

We have a starter tier, a growth tier, an executive tier. It's zero tw 19 and $29 a month. You get different levels of service. It's differentiated on service level. It's differentiated on volume, and it's not really differentiated on price, but a tiny bit depending on which tier and where you're shipping it.

and Then , there's other things that executive you would get. You would get access to the loyalty software. You would get access to the email marketing software start, or you wouldn't. people can try it out. There's a free trial and they can see if they like it. But we're like, again, in ups we're passing along the lowest possible rates to the consumer the monthly fees are quite modest but these are the way that we have great service.

We are the highest rated shipping platform in the United States. We have a 4.9 rating on Trustpilot, and I think the next one is like 4.5. 4.4. We really have great service cuz we know small business owners. They need help. They need handholding. And so one thing we focused on is, saving people time and providing great service.

Claus Lauter: When it comes to the onboarding and some, it's a Shopify app that should be very straightforward, but there's any kind of homework or signup process when it comes to the onboarding

Joe DiSorbo: Our app is in the Shopify app store, and if you click on it'll take you through a straightforward signup process.

It's pretty easy. If you go to our site and sign up, you don't need a credit card. You can just do a very basic signup and off you go. If you actually wanna buy something at the end, if you wanna buy a label, obviously you have to put in your credit card information to pay for that.

we're in the Shopify app store. You can go there, click on it, it's like a three-step process it's quite easy. And then , as soon as you do that, when you log into ship.com, it'll show all of your Shopify orders that are ready to ship.

You don't really have to do anything. You just have to click on the app in the Shopify store and basically it's all

Claus Lauter: automated after that. Okay, that sounds very convenient and straightforward. Cool. Joe, I think you have a great solution there.

Should make life of small and medium enterprises being on Shopify and other platforms, much, much easier. And again, the cost savings are massive, which they otherwise would not achieve. So great solution. Thanks so much for your time today. I will put the links to your website and to the Shopify store in the show notes.

As always, I know you just one click away.

Joe DiSorbo: All right. Thanks k Claus. I really appreciate it. I enjoy it. Thanks so much all. Bye bye. Bye.