Currently FBA (http://services.amazon.com/fulfillment-by-amazon/benefits.ht...) is a 3B$ business without any competitors. There are good reasons for that: it's capital-intensive, technically/operationally/managerially challenging, and can only really be learned by doing.
I've just finished architecting & implementing a 30k package/day distribution system from scratch, I know I can do better. FBA is a surprisingly low bar to clear (they're mathematically/structurally constrained), and the industry hasn't really improved since the 90's. And with the right structuring it can be mostly funded through debt & advance receipts.
Basically, I'm going to pick up where FlexPort (https://www.flexport.com/) leaves off (literally! Ha, logistics joke!) Except in an even less sexy vertical. :)
Depending which verticals you're trying to target, and who you think your end customers will be, there's a much larger shadow market for these kinds of services, currently being well served by a combination of "pure" logistics companies (UPS, FedEx, DHL, etc) and the largest contract manufacturers (Foxconn, Flextronics, Jabil, Sanmina, Pegatron, Quanta, Compal, and a couple more). If you haven't already researched this area, I think it would be a good way to spend a couple weeks.
Integrated supply chains are incredibly complex once you get to that level, and not really candidates for a new entrant. The big logistics players you list go after those contracts rabidly, and newly signed contracts have payoffs measured in decades.
It's a massive industry, nearly 1.8T$ this year. (Yeah, that's a T.) I'll be happy with carving out my little 50B self-serve niche before digging into integrated supply chains. :)
I would have thought UPS - and similar companies - would be considered competitors, which are no small fries! But, perhaps I'm looking at the wrong layer of the onion? And perhaps the layer you're referring to/hoping to operate in is n degrees removed from that. In any case, good luck!
It's not hard to get a dedicated fulfillment service once you've hit a decent size (say ~10k/day). But it's a very intensive sales process with long-term commitments.
They also tend to be both opaque and hard to integrate with other systems. Most use end of day EDI (yes, the 30yr old standard), some of the more "modern" ones have multiple drop times/day.
So major fulfillment providers (not UPS, which doesn't do fulfillment; but FedEx/Rakuten/etc.) are both inappropriate for fast-growing, flexible or seasonal loads, and don't support innovation in customer service for eCommerce companies.
FBA is a much more modern (and extremely successful!) service, but is only cost-effective if you're selling on Amazon. Their 3rd-party, non-branded service is not only prohibitively expensive but feature-light and under-developed.
As the ex-CTO of an ecommerce startup, I really hope you succeed and wish you the best of luck.
There's plenty of us, little guys that need logistics/fulfillment and the options just suck. There's a huge space between starting (when you can do it yourself with UPS/equivalent or even standard post) and when you hit a few thousand packages per day (when Fedex and similar is a decent option).
The main one is that, at least with the providers I used (three, including Fedex) there was no api and no way to interface with their systems automatically, everything had to be done through archaic websites with a usability designed before the dot com boom or by phone. During busy times (christmas shopping, for example), we had several interns dedicated exclusively to handle sending the info (number of packages, destinations...) to the supplier and printing the shipping labels.
I think that when you reach the thousands of packages per day, you are offered those services, but as a small setup with 'only' hundreds of packages, the only option was to do it manually. We had a simple system to handle orders, inventory, manufacturing... It would have been a breeze to integrate an api with it to print the labels automatically to give the guys actually preparing the packages.
We didn't get a lot of issues that usually pop up when talking ecommerce (scammers, false orders), we didn't even get many returns (I only remember a couple of cases) but we did get a few packages that disappeared in transit with no explanation or, obviously, a refund. The process to report those was horrible, similar to cancelling a mobile phone contract and in most cases we had to simply write-off the package and send a new one to the customer (actually, we are waiting for the resolution of a case when a package worth a few thousand euros was lost, we might actually get back that money).
Another thing that was annoying, although I know it's understandable, is that to start getting discounts they require a volume that, as a new company or sole trader you are simply not going to get. Paying the normal rate for Fedex, for example, makes packages quite expensive when you are talking international (and the fact that I live in an island with a population of less than 10M people doesn't help). We basically kept shipping costs to a minimum by eating into our profit margin. We got less money, but helped improve the sales.
This is an awesome idea and I wish you the absolute best of luck with it. As a software engineer in a startup that does our own logistics/fulfillment/warehousing/etc, I can say I'd love to see more modern products in this area.
Software eats fulfillment, basically.
Currently FBA (http://services.amazon.com/fulfillment-by-amazon/benefits.ht...) is a 3B$ business without any competitors. There are good reasons for that: it's capital-intensive, technically/operationally/managerially challenging, and can only really be learned by doing.
I've just finished architecting & implementing a 30k package/day distribution system from scratch, I know I can do better. FBA is a surprisingly low bar to clear (they're mathematically/structurally constrained), and the industry hasn't really improved since the 90's. And with the right structuring it can be mostly funded through debt & advance receipts.
Basically, I'm going to pick up where FlexPort (https://www.flexport.com/) leaves off (literally! Ha, logistics joke!) Except in an even less sexy vertical. :)