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Buy It on the Internet, Get It the Same Day.


One of the biggest drawbacks to e-commerce is delayed gratification. A new company from the fertile Idealab incubator aims to change all that.

City of Industry-based Shipper.com promises same-day delivery for Web purchases by linking up with e-tailers and bringing their products straight to consumers. Order an item by 2 p.m. from a Web business that is affiliated with Shipper.com and the product is supposed to be delivered by 8 p.m., seven days a week.

"There weren't a compelling set of options out there for consumers. Order today and pay a reasonable price to wait a week for your order, or if you want anything the next day, pay $10 for air freight," said Andrew Krainin, Shipper.com's senior vice president of marketing.

The goal is to create a network of warehouses and delivery systems all over the nation. Maintaining a short distance to consumers can enable same-day delivery.

The business launched on Oct. 13 in Los Angeles with a 100,000-square-foot warehouse and a 10-van fleet. A system of computers and interfacing software, along with some 60 customer representatives, are housed at the City of Industry warehouse to facilitate customer service within a 60-mile radius, including the Inland Empire and Orange County.

The company is looking to provide real-time information to customers to verify product availability. Delivery rates will run $10 to $15, comparable to next-day shipping rates.

In the past month, the company has opened a 75,000-square-foot warehouse in San Francisco, and six more will follow in New York, Atlanta, Chicago, Washington, D.C., Dallas, Seattle and either in Louisville, Ky. or Memphis, Tenn.

Among the targeted e-tail items, Krainin said, are apparel, toys, tools and household furnishings. Products can weigh up to 70 pounds (groceries or heavily refrigerated items will not be transported).

Once an e-tailer signs up, it agrees to supply its products for storage at the company's warehouses, and Shipper.com handles the delivery. Shipper.com charges retailers on a per-order basis, in addition to demanding delivery charges from consumers.

Krainin would not reveal which online retailers have signed up, but he said announcements will come within the next month.

The company's Web site will serve as a recruiting tool for e-commerce firms, as well as an address for consumers to track the status of their shipments.

The idea for shipper.com came when founders and friends Alex Nesbitt and Tom Hansen were working at separate companies. Nesbitt, a consultant for Boston Consulting Group, and Hansen, an operations officer at Nissan, were kicking around an idea to create a network of warehouses for Nissan car parts, which at the time were distributed through a centralized warehouse, delaying delivery. When Nesbitt was being courted by Idealab chief Bill Gross for another job, Nesbitt mentioned his idea, and the partners met.

Krainin declined to comment on how much venture money has been raised because the company hopes to complete a second round of financing in the next few months. Jupiter Communications analyst Bill Schatsky estimates that the figure may be $150 million, though that still may not be enough.

"Automated warehouses can cost tens of millions of dollars," Schatsky said. "Web Van (an online grocer) signed a contract earlier this year to develop a $1 billion distribution system around the country this year."
COPYRIGHT 1999 CBJ, L.P.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1999, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Comment:Buy It on the Internet, Get It the Same Day.
Author:SARKISIAN, NOLA L.
Publication:Los Angeles Business Journal
Geographic Code:1USA
Date:Oct 25, 1999
Words:551
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