About the Company

ShipHero is an e-commerce fulfillment and software service company that assists businesses with their warehouse management and order fulfillment needs. The company was started by Nicholas Daniel-Richards and Aaron Rubin, who previously worked in e-commerce and technology. ShipHero offers a dual service model: a SaaS platform to manage warehouse operations and outsourced fulfillment for businesses looking to offload warehousing and shipping tasks. The company has bootstrapped its operations, relying on limited external investment, and has grown rapidly in its first seven years.

The company’s software allows e-commerce businesses to track inventory, manage orders, and print shipping labels, while its fulfillment service stores products in ShipHero's warehouses and handles shipping. ShipHero caters to various sizes of businesses, ranging from small startups to larger enterprises. The service is particularly useful for companies seeking to streamline their warehousing operations without the burden of expensive, complex legacy systems.

The company’s impact is notable in the e-commerce world, processing more merchandise than Shopify at the time of its IPO. ShipHero’s business model is based on high flexibility and scalability, allowing businesses to easily integrate the platform with existing systems. With a focus on building strong customer relationships and providing excellent support, ShipHero has expanded its market reach and product offerings, setting the stage for future international expansion.

Idea Behind Company

The idea for ShipHero emerged out of frustration with existing warehouse management systems, which were often too expensive, cumbersome, and outdated. Aaron Rubin, who had experience running several e-commerce businesses, struggled with legacy systems that didn’t meet the needs of modern businesses. These systems were costly, complex, and difficult to use, which hindered the efficiency of warehouse operations. As a result, Rubin was motivated to create a solution that would simplify warehouse management using modern technology.

Daniel-Richards and Rubin came together after a chance encounter, with Daniel-Richards bringing his expertise in software development and Rubin offering his deep understanding of e-commerce operations. Together, they saw a gap in the market for a more accessible and user-friendly warehouse management system. The concept was to build a mobile app that could replace outdated systems, leveraging the widespread adoption of smartphones and tablets to create a more efficient and cost-effective solution for managing e-commerce logistics.

The initial version of ShipHero was designed to provide a simple, intuitive interface for warehouse workers, allowing them to manage orders from their mobile devices. The idea was to offer a solution that could scale with businesses of all sizes, from small startups to larger enterprises. This approach reflected a belief that e-commerce businesses would increasingly look for cloud-based, mobile-first solutions that could help them streamline operations and reduce overhead costs.

Creating the Company

The creation of ShipHero began with a focus on building a mobile-based warehouse management system that could handle orders efficiently and integrate seamlessly with e-commerce platforms like Shopify. The first step was developing a prototype, which was a proof of concept created using the iOS mobile operating system and a Javascript framework. Rubin handled the backend infrastructure while Daniel-Richards focused on the user experience of the app.

The early stages of development involved refining the core functionality of the software, including order management, inventory tracking, and label printing. As the product began to take shape, the team realized the need for additional features such as integration with various shipping carriers and e-commerce platforms. This required continuous development and iterative feedback from early users, including Aaron Rubin’s own warehouse and their first customer, WineChateau.com.

The team expanded their efforts by bringing in their first full-time developer, Russel, to help with scaling the software and adding more features. Despite the initial challenges, the founders maintained a steady focus on building a product that could solve real problems for e-commerce businesses. The process was slow but rewarding, with the software gradually evolving to meet the needs of its growing user base.

Launching the Business

ShipHero’s launch was a gradual process, starting with a “soft launch” where the software was tested in Aaron Rubin’s warehouse. The initial focus was on refining the product, fixing bugs, and adding new features based on user feedback. Their first paying customer, WineChateau.com, came onboard during this phase, and they helped test the software in a live environment. This provided valuable insights into how the software could be improved and what features were most important for users.

The company’s growth was initially slow, with minimal marketing or external funding. Instead, ShipHero relied on a grassroots approach, leveraging its network and word-of-mouth to attract customers. This approach worked well in the tight-knit e-commerce community, where businesses were looking for affordable alternatives to traditional warehouse management systems. Over time, the product gained traction, and ShipHero was able to expand its customer base through positive referrals and reviews.

In the early years, the company did not engage in aggressive advertising but focused on perfecting the product and providing excellent customer service. It wasn’t until 2020, several years after launching, that ShipHero began to scale its sales efforts, hiring its first outside sales representative and investing in online advertising. The focus on product quality and customer support, however, remained central to the company’s strategy.

Earnings

By 2020, ShipHero had grown to a $30 million-per-year business, processing over $5 billion in annual e-commerce merchandise volume. Despite being a bootstrapped company, ShipHero was able to generate significant revenue through its SaaS and fulfillment services. The company’s model is designed to be scalable, allowing businesses to grow without the need for large capital investments in warehousing and logistics.

ShipHero’s revenue comes from two main streams: its software-as-a-service (SaaS) platform, which businesses pay a subscription fee to access, and its fulfillment service, which is based on the volume of products stored and shipped. As of 2021, the company continues to expand its customer base, offering fulfillment services across the U.S. and planning international expansion. The growth of its SaaS platform, alongside the scaling of its fulfillment network, positions ShipHero for continued success in the growing e-commerce logistics market.

The company's earnings have been bolstered by its ability to keep operational costs low and reinvest revenue back into product development and customer support. While the company has not raised venture capital, its organic growth strategy has proven successful in scaling the business without taking on significant financial risk. With plans for further expansion and the launch of new features like an app store for third-party developers, ShipHero is poised to continue its growth trajectory.