Supply Chain Startup: From Amazon and Zulily to SC startup

Seattle-based Shipium is focused on improving e-commerce fulfillment, using lessons learned from two e-commerce behemoths

Subscriber: Log Out

The secret ingredient to leading e-commerce supply chains is not technology, but experience. That was one of my takeaways from a visit to an Amazon fulfillment center this past February. You just learn stuff when you’ve been shipping hundreds of millions of packages, or more, year in and year out. And, in Amazon’s case, experience has taught it how to focus on delivering an unparalleled customer experience at a reasonable cost.

That concept was echoed in an interview I had with Jason Murray, an Amazon veteran, and the co-founder of the Seattle-based startup, Shipium with Mac Brown, a Zulily veteran. Last December, GeekWire reported that Shipium landed a $2 million seed round led by PSL Ventures, the venture arm of Pioneer Square Labs.

Among his duties at Amazon, Murray worked on projects related to fulfillment processes at distribution centers, helped develop the Fulfillment By Amazon initiative and from 2010 to 2016 worked on how to redesign Amazon’s supply chain using data science to reduce the cost of shipping for the Prime program, which guaranteed 2 day shipments. “What we found is that the biggest lever in reducing that total cost was to get inventory as close to the customer as possible to reduce the shipping cost,” he recalls. “If we weren’t close to the customer, we had to pay a penalty to fly the shipment. We spend an inordinate amount of time determining how close we had to place inventory, and when we had to split a shipment.”

Murray says that the lessons he learned at Amazon, as well as those Brown learned at Zulily, led to starting up Shipium. Essentially, the “behemoths of ecommerce,” as Shipium refers to them, were founded by entrepreneurs and risk takers and are now training grounds for the next round of entrepreneurs. On its website, Shipium notes that it sometimes seems as if the big guys “are using the dark arts to gain an advantage. But their advantage comes from relatively simple ideas that other companies can adopt.” Of course, they seem simple now because the behemoths spent all those years learning by trial and error.

“Mac and I chose logistics because its what we know and learned,” Murray says. “I came out of school as a computer scientist and knew a lot about pilot programs. When I was at Amazon, the lightbulb went off that this is a fascinating problem, it’s not easy to solve and it has massive cost implication to the business.” Moreover, he adds, “logistics is usually the highest or second highest fulfillment cost behind labor, it’s a black box and its under-served. It just made sense to go after it.” 

Shipium’s idea is to provide tools to improve the customer experience and reduce fulfillment costs in the e-commerce channel. “Our observation, and what we’ve been hyper-focused on, is to make the trade-off on optimization – how much is a company willing to pay to provide specific SLA’s and do they want to do that across the board or in a targeted way – and then to improve the way a site communicates relevant information to the costumer,” Murray says.

So, how does it do that? A couple of ways, all through data science and analytics. First, are tools that use analytics to understand the performance of different delivery options. With that, a company can understand in real-time “the fastest delivery date [it can] promise shoppers” based on criteria set by the company. That allows the company to display estimated delivery dates on product detail or cart checkout pages. That can increase cart conversion. Next are tools to automatically pick the fastest and most cost-effective shipping method based on package specifics, carrier contracts and policies and then send the decision to fulfillment partners. Last are supply chain analytics tools to improve customer-centric metrics.

The company has clients now who “are larger in size and have some form of shipping contract through a 3PL that they want to use,” Murray says. As the platform evolves, with more data to analyze and numbers to crunch, he believes the tool will provide information that customers can use to allocate inventory and design their fulfillment networks. “Solving the logistics and fulfillment challenge has multiple variables,” Murray says. “That’s the attraction that keeps us going on this.”

SCMR’s Supply Chain Startup Blog is published every Friday. If you’re a startup, a venture capitalist or a supply chain practitioner working with startups, and want to share your story, or have startup news to share, email me at [email protected]. Remember that the purpose is not to promote any one firm – and a blog shouldn’t be interpreted as an endorsement of a firm or its technology. Rather it’s to start the dialogue between me, my readers and the people creating the NextGen Technologies that will power tomorrow’s supply chains.

SC
MR

Latest Resources
Skills Report 2025: Supply chain and procurement trends
What are the biggest challenges facing supply chain and procurement leaders right now? Get the details in this just-released research brief.
Download

About the Author

Bob Trebilcock, MMH Executive Editor and SCMR contributor
Bob Trebilcock's Bio Photo

Bob Trebilcock is the editorial director for Modern Materials Handling and an editorial advisor to Supply Chain Management Review. He has covered materials handling, technology, logistics, and supply chain topics for nearly 40 years. He is a graduate of Bowling Green State University. He lives in Chicago and can be reached at 603-852-8976.

View Bob's author profile.

Subscribe

Supply Chain Management Review delivers the best industry content.
Subscribe today and get full access to all of Supply Chain Management Review’s exclusive content, email newsletters, premium resources and in-depth, comprehensive feature articles written by the industry's top experts on the subjects that matter most to supply chain professionals.
×

Search

Search

Sourcing & Procurement

Inventory Management Risk Management Global Trade Ports & Shipping

Business Management

Supply Chain TMS WMS 3PL Government & Regulation Sustainability Finance

Software & Technology

Artificial Intelligence Automation Cloud IoT Robotics Software

The Academy

Executive Education Associations Institutions Universities & Colleges

Resources

Podcasts Webcasts Companies Visionaries White Papers Special Reports Premiums Magazine Archive

Subscribe

SCMR Magazine Newsletters Magazine Archives Customer Service

Press Releases

Press Releases Submit Press Release