Shipbeat failure

Shipbeat

Shipping API for e-commerce companies

Description

Shipbeat was a location-based platform designed primarily as an aid to small to medium-sized e-commerce businesses. Shipbeat aimed to help companies deal with logistics issues while maintaining their services at the top of their game. The idea was derived from the need to have a modern and reliable service provider, which could, in turn, lead to greater savings and revenues for the online retailer. Shipbeat also wanted to make the process of delivering goods to customers more transparent and flexible.

Stats

Category
e-Commerce
Country
Denmark
Started
In 2014
Closed
By 2016
Number of Founders
Two
Name of Founders
Joachim Rørbøl, Kenneth Svenningse
Number of Employees
Between 11 And 50
Number of Funding Rounds
1
Total Funding Amount
€1.2M
Number of Investors
3
Precise Cause of Failure
Multiple Reasons
Business Outcome
Bankruptcy

Cause of Failure

In order to achieve a win-win situation for customers and online retailers while at the same time gain a margin profit that could cover the costs of service maintenance, few prerequisites had to be taken care of.

The major obstacle Shipbeat encountered was the unwillingness of the main shipping carriers in Denmark to cooperate with the e-commerce platform. In other words, there were few of them who maliciously tried to stop the intentions of Shipbeat to reduce the overall logistics costs by re-selling what they initially had to offer.

The other serious problem they had to face, was when Shipbeat tried to expand their logistic services in other market areas. They had difficulties while trying to integrate a new set of carriers into their operations since forming new partnerships was often a negation heavy and slow process and they had not enough influence or user base to gain the full attention of critical carriers in new regions.

Moreover, from the technological and logistic side, any big or minor change often created an additional hustle for all parties involved, from the carriers to the customers as well as potential warehouses.

After the idea of reaching out to a shipping broker as a possible solution failed, the company declared bankruptcy.

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