Why ShipBob Is Quickly Becoming The Best E-Commerce Fulfillment Service

Why ShipBob Is Quickly Becoming The Best E-Commerce Fulfillment Service

The pandemic created enormous consumer demand for online shopping, which fueled e-commerce growth at a dizzying pace. That boom shows no signs of slowing. Retail e-commerce sales already totaled more than $222 billion in just the first half of the year. And as more and more consumers shift to shopping primarily online, that rapid growth will continue.

This sudden change in consumer behavior has created an enormous opportunity for many small and medium-sized businesses (SMBs) to significantly grow their e-commerce sales. However, this growth also presents a host of challenges, especially considering the current world-wide supply chain dilemma. All of that means SMB owners are being forced to shift their attention away from what they love to do in order to focus on necessary but tedious tasks. Their time is swallowed up by picking, packing, and shipping orders. 

Entrepreneurs start their businesses to solve problems and delight their customers with unique products and solutions. They don’t start businesses with a vision of spending their days thinking about logistics. Well, correction. Most entrepreneurs don’t. The co-founders of ShipBob, on the other hand, found purpose in handling the messy, time-consuming fulfillment stuff so other entrepreneurs can focus on the bigger picture of their businesses.

In 2014, Divey Gulati and Dhruv Saxena were looking to solve a shipping pain point they were facing in their own e-commerce business. They knew that the challenge of striking a balance between time- and labor-intensive order fulfillment and the work necessary to help the business grow wasn’t unique to their experiences. Meeting customer expectations and matching the bar set by Amazon Prime’s two-day delivery can create a logistical bottleneck for any e-commerce business looking to scale up.  

And it is a high-stakes undertaking. In a recent survey, 47% of customers said a bad order fulfillment experience could be a dealbreaker in earning their repeat business.

Rather than simply finding a solution to their own challenges, they opted to build a supply chain that could support other growing e-commerce brands. Divey and Dhruv’s company, ShipBob, launched through Y Combinator not long after. They focused on a clearly defined purpose—help e-commerce businesses succeed and scale by making world-class logistics and fulfillment accessible to them, whatever their size.  

Today the Chicago-based company has reached prestigious unicorn status, raised $330.5 million in funding, and operates a global logistics network with 26 fulfillment centers across 5 countries. But they started like many of the 5,000 merchants they now serve—navigating the ups and downs of fulfilling their dream to make the world a little better by building a business they love. 

The first test of Divey and Dhruv’s mission and model was on the streets of Chicago. They knew firsthand that e-commerce business owners had regular standing dates at the post office counter.  So that’s where they started, standing outside of post offices, approaching customers and offering to pack and ship their items so that entrepreneurs could get back to the bigger tasks of growing their businesses. 

The two found that while their customers were thankful for their services, postal employees were less enthusiastic. Clerks seemed annoyed by how frequently they visited the counter to mail packages, and they even found themselves being chased out by the postal police and banned from several local post offices.  

What drove them forward was the belief that they could make fulfillment operate as seamlessly for merchants as tech platforms like Shopify. But they were taking on a different—maybe even a more daunting—challenge; they needed to balance technological innovation with the physical realities and challenges involved in building a business that relied on warehouses, forklifts, and trucks. 

A deep, personal motivation and sense of commitment fueled them to overcome many early obstacles. I talk about the importance of this foundation in my forthcoming book, Purpose First Entrepreneur. When entrepreneurs tap into their purpose, they draw strength and a greater drive to succeed. They are better able to see the big picture beyond the immediate setback, allowing them to innovate where others might fold. 

Fast forward from 2014 to 2021. The ShipBob founders are realizing their vision. Their platform empowers thousands of merchants with a single view of their businesses across all of their sales channels, products, inventory, orders, and shipments, which allows them to leverage analytics and reporting to run their businesses effectively.

By creating a platform that takes the pressure of fulfillment off the shoulders of entrepreneurs, ShipBob helps them reach their goals. And those goals are as unique as each of the thousands of ShipBob customers. Their stories highlight the value of the platform ShipBob has built. 

When Leonie Lynch was pregnant with her first child—and later, nursing her baby—while studying for her PhD, she experienced the kind of exhaustion she’d never known before. She craved sugar and coffee. Like so many of us, she knew she needed nourishing foods but also longed for someone else to do the thinking and planning. 

One day, she saw a baby formula label that said, “Everything your baby needs in one place,” and thought to herself, “I need that too.” After a few variations, she made a big pivot toward a nutrient-dense powder made with natural ingredients—all you need is a blender and cold milk or milk alternative. That idea turned into Juspy

But having created a fantastic solution that she knew could help so many customers, Lynch found herself bogged down by the amount of time she needed to invest in preparing orders for shipment. Here’s how she describes those early days:

“50% of my time spent was packing boxes. Not only that, but it was a constant interruption. I would sit down to do an email marketing campaign, have to attend to new orders, and completely lose my train of thought and flow. I spent about 3 minutes per order on fulfillment. I almost didn’t want orders to come in. Before ShipBob I would have been terrified if an influencer posted about our product, and an instantaneous 1,000 orders came in, I would have had no way to handle that. Now I am totally ready for that. I think the biggest benefit of working with ShipBob is the blocks of uninterrupted time I have back. I feel so free today. It really takes the stress out as a lone wolf entrepreneur.” 

Lynch is one of many merchants who rely on ShipBob to help them focus on the big-picture tasks of their businesses. Another of ShipBob’s long-standing customers is Rebel Girls, which publishes the hugely successful Good Night Stories for Rebel Girls series. Authors Francesca Cavallo and Elena Favilli wanted girls to be exposed to aspirational stories of real women, so they set out to write bedtime stories that celebrate extraordinary women from diverse backgrounds.  

Their purpose is clear—to empower the next generation of women by sharing stories about women changemakers, past and present. Partnering with ShipBob has allowed Rebel Girls to fulfill orders quickly and distribute these stories to hundreds of thousands of readers, leaving them better able to focus on new products that continue to build on their purpose.

ShipBob’s partnership with Touchland demonstrates how a top-notch third-party logistics platform opens the space for companies to create change for their customers and beyond. Long before the spike in demand for hand sanitizers during the pandemic, Andrea Lisbona saw the need for high-quality, moisturizing sanitizers that people wanted to use and dispensers that used smart technology to alert owners when they need to be refilled or are low on batteries. 

They were already growing quickly when the pandemic began, then completely sold out. Over the course of three weeks, they waitlisted more than 34,000 customers. Working with ShipBob allows the Touchland team to spend more time on marketing and scaling, as fulfillment is tackled behind the scenes. That frees their time to work on adding new partnerships (most recently with Disney), new products, and new initiatives, including shipping dispensers to K–12 public schools to help teachers and students go back to school in a safe way

Today ShipBob ships millions of items every month, serving 5,000 customers whose businesses are proving that purpose has an exponential impact on performance. And ShipBob continues to invest in the future success of their merchants, partnering with Walmart as their preferred two-day delivery partner, Shopify Plus as their only certified global fulfillment partner, and Pachama, which allows ShipBob customers to offset emissions and make their shipments carbon-neutral.

ShipBob’s successes highlight the power of purpose not only in developing a single business but in creating spaces in which other businesses can thrive. ShipBob’s model is one to emulate because it shows that a focus on purpose can not only be profitable, it can allow others to fulfill their purpose and change the world in ways that benefit us all.

*My firm invested in ShipBob