the importance of shipping in online commerce

Shipping is a BIG DEAL to online buyers and sellers. After the supply & demand for an item has been made efficient (marketplace), and after payment friction has been removed (checkout), getting goods from sellers to buyers quickly and inexpensively increases in importance.

I thought this was a great New York Times piece highlighting the perspective of the US Postal Service, and how business models can adapt over time to turn a competitive threat into an advantage. Rather than going the way of the telegram, snail mail is booming.

My two favorite quotes:

1) “Six years ago, people were pointing at the Internet as the doom and gloom of the Postal Service, and in essence what we’ve found is the Internet has ended up being the channel that drives business for us,” said James Cochrane, manager of package services at the Postal Service.

Hot thought: Sure email, evites and online greeting cards have taken a bite out of USPS revenue, but the Internet has been a boon to USPS package delivery, thanks to online commerce.


2) Mr. Henderson (former postmaster general and current COO of Netflix) is “the only guy on the planet who looks at our volume of mail (1.4 million movies shipped every day) and thinks of it as quite small,” said Reed Hastings, the chief executive of Netflix, which is based in Los Gatos, Calif. “It’s a trickle of mail to him, where to anyone else it’s a torrent.”

Hot thought: With shipping is so core to online commerce companies, who better than the postmaster general to give an operation needed perspective, efficiencies and innovative thinking. Now that's thinking outside of the shoebox...