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Shipium says its AI will let small online businesses go head to head with Amazon

  • Mike Pearl
5/11/2022

Add AI to your mom-and-pop online store. Now you’re a mini Jeff Bezos.

If you’re a small-time online retailer — meaning almost anyone but Amazon — the sort of insanely fast and cheap shipping we’ve all come to expect from Prime often seems unattainable. Customers at mom-and-pop e-commerce sites just have to tolerate a “free shipping” toggle at checkout that says that band t-shirt or replacement windshield wiper motor won’t arrive until next week at the earliest. And if you’re among those boycotting Amazon due to labor or environmental concerns, it’s understood that you’re sacrificing convenience. That’s just the way shipping works for the small fish.

What the Seattle-based startup Shipium seems to be asking is: Why should it?

Shipium wants independent e-commerce businesses to be able to promise Amazon-like speeds to customers when they hit “checkout,” in order to prevent them from getting spooked by a long wait and taking their business elsewhere. And, Shipium says, those businesses will keep their promises and actually deliver on time — all with the help of a little AI.

Co-founded by James Murray, an ex-Amazonian who says he “led the effort to reimagine Amazon’s supply chain to support Amazon Prime,” Shipium got injected with $27 million of Series A funds from Insight Partners on April 14, so it sounds like investors buy the idea that this can be done.

The company website paints a picture of your AI-enabled e-store as a mini-Amazon, but won’t just start making two-day shipping promises the day you sign up.

First, Shipium will build out your infrastructure. The service calculates how and when to shift your inventory into fulfillment centers around the country in order to “predict future distribution and transfer variability.” Next, it “algorithmically models delivery estimates based on several inputs,” so when a customer hits “buy” you’re making shipping promises you can actually keep, based on Shipium’s calculations around a “complex nodal network.” Finally, it keeps your shipping costs from skyrocketing by making the shipping services you’ve signed up for automatically compete with one another to give you the best price.

It’s an audacious promise, and if it works, it could help smaller companies claw back a little bit of market share from the Big A.

As for how realistic or necessary this all is, Murray pleaded his case on the Future Commerce podcast a little over a year ago. “80% of the stuff that you use for fulfillment in e-commerce is the same,” he pointed out. The other 20%, he said, is what’s unique to a specific business — soft mailers if you’re shipping underwear, or reinforced boxes for precision machines with lots of small parts.

Murray compares his business to OpenGL, which revolutionized 3D graphics rendering in the 1990s by working across platforms to speed up the creation of common repeated patterns. “I think we’re kinda starting to make that transition,” Murray said on Future Commerce. “There should be some basic building blocks and basic pieces that you can use to put together the supply chain.”

And, lest you think you can get ambitious and set up an Amazon-like network on your own, on a panel discussion four months ago Murray claimed you really need AI. “E-commerce is real-time, complex and dynamic,” he said, adding, “Humans making those decisions just won’t scale.”