Robert Pazornik, Founder of LicketyShip, writes on The LicketyShip Blog:

If Amazon — without any local stores — can find a way to get a product delivered to you the same day you buy it, the big question is, why haven’t major retailers — with hundreds of local stores in North America alone — found a way to do the same?

In theory, with a quiver full of local stores at their disposal, retailers could potentially get products to their customers much, much faster than Amazon. With storefronts in the neighborhood of virtually every household in a major U.S. market, it’s practical to imagine that retail customers could get products delivered to them in just a few hours, as opposed to the 12 or so that Amazon requires.

The explanation for why this hasn’t happened yet is complex. But we can isolate 2 main reasons why this service is taking so long to come to market:

a) lack of inventory control
b) lack of a local delivery mechanism

The first problem — lack of inventory control — naturally makes local shopping difficult. If you don’t know what products you have on the shelf, how can you sell them to customers? This has been a problem for as long as retail has existed. You should be able to recall with ease the last time you searched a store high and low for a certain item, only to have a clerk look up the product on a store computer and exclaim “the system SAYS we have 5 in stock!?”

But over the past 5 years or so, the accuracy of store inventory accounting has improved dramatically. The sweeping popularity of “In-Store Pickup” (the shipping method for online purchases where you can choose to pick items up at your local store for free) has forced retailers to step up their ability to predict which items are in stock so they can offer this service. This option has grown in popularity to the point where some retailers report that 50% of their items purchased online are “shipped” using this method.

But just knowing what you have on the shelves doesn’t solve problem #2: how to get those items delivered from the store to the customer.

Local delivery isn’t as easy as it sounds. FedEx, UPS, and DHL aren’t designed to do on-demand deliveries from stores. The items customers purchase online are shipped almost exclusively from far-away distribution centers, from which products are funneled by the major carriers through a sophisticated network of central and regional shipping hubs — a process honed over decades of operation — before reaching the customer.

With the fastest, most expensive shipping online option available (”Express” or “Next-Day”), that process usually takes 2 days at a minimum — 1 to locate and pack the item, and 1 to ship — or 4 days at a maximum if the order is placed over a weekend, when traditional carriers do not operate.

That’s where LicketyShip steps in. LicketyShip has designed a turnkey software and logistics solution that integrates smoothly with retailers’ legacy online platforms and store protocols to provide an efficient method for delivering products direct from local stores at affordable rates.

In other words — when retailers use LicketyShip, they have an easy way to get products delivered from their brick-and-mortar stores to their customers the same day they buy.

Getting your products closer to buyers means faster delivery; faster delivery means happier buyers.

And that’s how you get closer to your customers.

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Guy Kawasaki writes:

LicketyShip provides courier-service shipping. Its prices are comparable to, and often less than, companies like FedEx, UPS, and DHL. Basically, LicketyShip acts as a aggregator of multiple couriers: it’s researched couriers’ reputations and prices for you.

When you want to ship something, go to LicketyShip’s site to enter what you need delivered, where, and when, and it helps you select the best courier. Then you place an order with a credit card. You can even track your delivery just like with the big boys/girls.

Maybe you don’t have anything to ship right now, but from a purely marketing perspective, you should check out the company’s testimonial page featuring K&L Wine Merchants and the Los Angeles Times. Compare this to the usual bull shiitake that companies write to “prove” their worth. And you have to admit that the name is clever: “Lickety” for speed, “Ship” for what it does.

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Screenwerk writes:

Local same day delivery service LicketyShip, which leverages existing courier networks using an online infrastructure, has expanded beyond the Bay Area to L.A., Orange County, Sacramento, San Diego. Here’s a recent Daily Candy write-up of the service. The company has a partnership for same-day delivery of items on sale at Tribune-owned Recyler.com in Los Angeles.

Matt Booth on the Kelsey blog has a fairly extensive discussion of LicketyShip and the Recycler partnership. For the service to succeed, there are a couple of things that need to happen:

1. Consumers (and local businesses) need to be aware that costs are reasonable
2. Users need to be trained to use the service instead of going out and doing deliveries/pick-ups themselves.

Interestingly, the service is something of a bridge between e-commerce and local shopping in certain circumstances.L

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Daily Candy Los Angeles writes:

Good news! Your pants are ready to be picked up at the tailor across town.

Bad news. It’s 5 p.m. and el traffico diablo is raging.

Good news! LicketyShip will fetch your wares so you don’t have to.

Even more good news: It’s shockingly easy. You go to their site and type in what, where, and when you need a pickup. They search their database of trustworthy couriers for the best deal (this takes mere seconds). Then you pay by credit card and let the other party know that LicketyShip is on the way — they take care of the rest.

While you wait (no more than four hours, mind you) you can track the mission on their site. Once it’s delivered, you get a confirmation via text.

Bad news. Oh, never mind. There is none.

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The Kelsey Group writes:

Summary

LicketyShip will announce a partnership with the Los Angeles Times-owned Recycler.com today to provide a same-day local delivery option for classified customers. This sounds ominously like bubble era companies that went bust, for example, Kozmo.com, which burned through more than $200 million in venture funding. Or who could forget the wonderful Wired articles of Webvan drivers forced to repeatedly deliver packs of gum to eager college students who thought repeat deliveries for low-cost items was the joke du jour? It turns out that the LicketyShip strategy is a little different – an interesting hypothesis with a few surprises.

Analysis

LicketyShip, unlike its early market predecessors (read, Strategy & Business, Q3, 2000), does not own or operate the fleet of couriers. The company’s strategy is to aggregate existing courier networks, source demand and schedule deliveries through its Web application. Consumers can rate couriers on their delivery experiences. LicketyShip already has nearly 500 couriers on-call in California markets. That is more than Kozmo.com had in the state at its peak in 2000, and about half of Kozmo.com’s national courier fleet.

Law firms and architects have long utilized couriers to deliver legal documents and plans. After all, who could forget Kevin Bacon’s breakout role in Quicksilver as a down on his luck day trader turned NYC bicycle messenger? The heading Delivery Service generates 11 million references a year in print Yellow Pages and $10 millions in advertising fees. Estimates vary but a Canadian study suggests that local city next-day delivery was roughly 14 percent of all delivery services made by large operators. On the other hand, same-day local couriers are a fragmented market, dominated by small mom-and-pop operations that source leads through Yellow Pages and existing client relationships.

This simple concept has brought investors to the company like Kendall Fargo, CEO of StepUp Commerce. Kendall’s company was acquired by Intuit last year for US$65 million. He liked the idea so much he personally invested in LicketyShip.

The biggest surprise here is the price of local same-day delivery. If you thought a service like this was expensive, you’re not in the minority, but you would be wrong. According to Founder Robert Pazornik, the price of same-day in-city delivery is close to a next-day FedEx. Prices for a four-hour delivery start at $19.99. That price includes 10 miles and up to 200 pounds. The weight included in delivery does vary by market. Additional mileage varies from courier to courier in different markets but is roughly ~$1.20 to $1.85 per mile.

Newspaper classified companies, like the LA Times, are interesting partners for more reasons than you might think. You’ll certainly never escape the fact that for some items consumers have a clear need to “see and feel” what they are purchasing. Nevertheless, given the types of goods that are exchanged locally, many are heavy and hard to transport. The previous local delivery option meant calling the friend with the truck to help you out.

Then there is the payment, usually cash or a check exchanged between two individuals who only a few days before had never met. This is a little ominous under the best of circumstances. “Sure. I’ll meet you somewhere I’ve never been and bring cash.”

EBay, of course, solved this issue with PayPal. Similarly, LicketyShip offers to transfer funds between buyers and sellers using PayPal or Google Checkout. Traditional classified companies have long been denied capturing the true value at the point of sale on these cash transactions.

Even as just a simple incremental revenue program for newspapers, assuming the LA Times performs well, LicketyShip will likely strike more of these traditional classified deals with other news groups.

“We are doing a revenue share with LicketyShip on every completed transaction,” Jeremy Woodlee, GM of the Recycler, told us. “We’re forecasting very low numbers 1 [percent] to 2 percent of total visitors to be conservative. It would be nice if the service really took off, but I think that even if a handful people find it useful then it will be worthwhile. It’s a good feature for our users.”

Tags: LicketyShip

Michael Arrington of TechCrunch writes:

New startup LicketyShip, the Kozmo-like ecommerce service that delivers goods within a couple of hours of ordering, is counting on this holiday season to make a name for itself. The company, which we first noticed back in January, launched in September, but they’ve recently gotten a lot of mainstream press attention and are offering $9.99 delivery up through Christmas Eve. So while the big ecommerce sites can no longer get stuff to you by the big day, Lickety Ship is still running strong. The company is only shipping same day in the Bay Area currently.

They are almost certainly taking a hit on the $9.99 deliver charge - LicketyShip outsources delivery to local couriers with extra capacity to make deliveries, which is costly. While the holiday season is a good time to pick up extra customers for ecommerce companies, Lickety Ship may be sending the wrong signal with the greatly reduced delivery charges.

Kozmo, which offered free deliveries within an hour, flamed out spectacularly in 2001 after burning through $280 million in capital. Real-time deliveries are expensive, and just because there’s lots of demand to have stuff delivered in a couple of hours doesn’t mean there’s a good business model there. LicketyShip needs to prove that people will pay $20 or more (their break even cost) to have something delivered in a couple of hours. The company says that 30% of Amazon orders are for overnight delivery, where the cost of shipment often exceeds the cost of the item itself. If that’s accurate, then there may be a bright future for the company. But Lickety Ship needs to focus their marketing attention on that segment of the market, not last minute Christmas shoppers.

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From the LicketyShip Blog:

Check out this month’s Rolling Stone for an interesting feature on “The Web 2.0 Elite.” Our very own CEO Robert Pazornik is featured in the piece, pictured below playing a particularly intense game of foosball…
Here’s a link to the teaser full article at Rolling Stone’s website. For a look at the complete 8-page spread, pick up the November 16 issue of Rolling Stone on newsstands.

From left to right, the “Baby Billionaires of Silicon Valley” are Blake Ross (FireFox), Mark Zuckerberg (Facebook), Matt Sanchez (VideoEgg), Robert Pazornik (LicketyShip), Seth Sternberg (Meebo), Todd Masonis (Plaxo). Also featured are Chad Hurley & Steve Chen (YouTube), and Bram Cohen (BitTorrent).

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The Internet’s new boom kids are poised to take over the world — if they don’t crash first

DAVID KUSHNER

LicketyShip Founder & CEO Robert Pazornik was mentioned in this Rolling Stone article. Some excerpts:

That’s why they’ve gathered here tonight. This is one of the first meetings of a secret society they formed and jokingly called the Young Guns; a more apt moniker might be the Valley Brats. It’s an invite-only cabal of the most powerful under-thirty-year-old mavericks in town. Every few weeks they gather to drink, plot global domination, make friends and, mainly, just act their age. “We got sick of hanging out with older guys,” says the Brats’ gregarious founder, Rob Pazornik, twenty-six-year-old creator of an online shopping startup called LicketyShip. “All they talk about is mortgages and nannies. It’s like hanging out with your dad’s friends.”

And:

When they arrived at the tail end of the late-Nineties boom, they quickly realized their predecessors seemed more interested in cashing in than breaking ground. “Their business plans were ass-backwards,” Pazornik says, “and the excess was, like, totally out of control.” Pazornik, a square-jawed guy with a backward Yale baseball cap, raises his voice above the hip-hop music in the bar and tells the guys a cautionary tale. One night in 2000, he went to a geek bash. To hype their new product, some startup guys had transformed a warehouse into a rave. They hired dancing girls, DJs, put on a cheesy light show. For the finale, fog machines blanketed a stage in smoke. And then the guys wheeled out . . . an empty purple box. The big plan was to sell those boxes online. Boxes that, um, you would put outside your house to collect your FedEx packages. Yes, it was ludicrously dumb. Pazornik recalls gawking at the overkill — the hot girls, the lights, the fawning venture capitalists — and having one thought: “Man, this is crazy.”

In geek-speak, hype that never materializes is called vaporware. The nascent Brats share a passion for creating something that will last. They found an audience by tapping a personal need. Ross, an earnest and self-taught prodigy, created Firefox after getting frustrated with the incessant pop-ups and viruses associated with Microsoft’s ruling Web browser, Internet Explorer. Zuckerberg made Facebook as a way for students to keep in touch with one another online after his university, Harvard, dragged its heels on a promised student directory. Pazornik created LicketyShip, a shopping site that one-ups Amazon by offering same-day deliveries, after he ran out of ink while printing a term paper at Yale. “Each of us is running a company that is intended to change the game,” says Pazornik. “We’re not making building blocks, we’re making explosive technology.”

And:

In February, Noah Kagan, a partner in OneClickTennis, an online site for Bay Area tennis players, convened a panel of young CEOs called Entrepreneur27. As the featured guests on the panel, Pazornik met Ross and Masonis. They stepped into the room to find it jammed with hacker geeks in graphic tees just like them. Though the panelists were familiar with one another’s startups, they hadn’t met in the flesh. But they had mutual friends and acquaintances — Zuckerberg, Sternberg, Hurley and Chen. The more they talked, the more they found they had in common. “We could go out and buy a Ferrari tomorrow,” Pazornik says, “but we’d rather change the way people live.”

They also share a mutual respect. “Blake had done this amazing and powerful thing,” says Pazornik. “He one-upped Microsoft!” Sternberg idolized Zuckerberg. “Mark has this amazingly clear insight into his users,” he says. And each of them could learn from Masonis, who had been navigating the murky waters of venture capitalists the longest.

So Pazornik had an idea. Round up the others. Let’s start a band.

After pazornik floated the idea of forming a secret society, the Valley Brats hit their IMs and started texting their like-minded pals. They met for the first time as a group in June at a Palo Alto dive. It was awkward at first, since they had little experience shooting the shit for fun. To break the ice, they came up with their version of a fraternity handshake: removing the batteries from their cell phones and slamming them on the table. “I suppose we could just turn our phones off,” Zuckerberg says, “but this makes more of a statement.”

At first, they made small talk, kicking around their common celebri-geek experiences. “We talked about photo shoots,” says Ross. “Yeah,” snickers Zuckerberg like Beavis, “photo shoots suck.” They talked about the pressures, and the harsh reality that getting millions from venture capitalists doesn’t make you rich. Just like in the music industry, venture capitalists want a heavy return on their investment, which means these guys pinch pennies until they bleed.

While collectively valued at roughly $4 billion, few are making six figures. Fearful of blowing their wads, the Brats don’t sit around ordering Dom Perignon, they compete over how cheap they can be. Matt Sanchez, a twenty-five-year-old behind a startup called VideoEgg, is buried in student loans. Pazornik treated himself to a forty-dollar punching bag. Zuckerberg splurged on a $100 amp. “The only other things I’ve bought myself are a sword and a teapot!” he brags. Yet everyone from their parents to the wanna-be geeks jamming the Entrepreneur27 assume they’re loaded. “It’s ridiculous,” Ross confided. “Even my mom thinks getting $10 million [from investors] makes me rich.”

These days, when they’re not together as a group, they hook up informally around town. Pazornik and Sanchez soon became the designated frontmen of the group: gregarious, sociable, laid-back. Zuckerberg and Ross, the resident Jedi masters: quiet, stealthy and insightful about how to focus on building a product while resisting the urge to sell out too soon. Power schmoozer Sternberg and egghead genius geek Masonis, middle school friends from Connecticut, are a dynamic Odd Couple.

Tags: LicketyShip