Every day, y’all — every dang day — we hear about a new Something-as-a-Service for developers. But this one’s actually intriguing.

Postmaster is a new TechStars company, and its entire purpose is to give ecommerce developers/entrepreneurs a way to sidestep all the drama and pathos that comes with shipping small packages. Given the current hotness that is subscription commerce startups (see: MeUndies), it makes a heck of a lot of sense.

The Postmaster RESTful API will let you programmatically create shipments, track packages, validate addresses, integrate with FedEx and UPS and USPS — all that super-fun, administrative-nightmare stuff. But instead of using your wasted youth and a choked sob to get the job done, you can just use standard HTTP verbs and client libraries for Python, Ruby, PHP, Java, and Go (hah! someone’s showing off).

“There’s been a ton of innovation around all aspects of retail and ecommerce — payments, storefronts, UX and UI — everything except for shipping logistics,” said Postmaster cofounder and CEO Jesse Lovelace in a statement on the news.

“Carrier integration is extremely cumbersome, and their APIs are out of date. Postmaster wants to not only make this process easier than ever before, but by harnessing shipping data and analytics, ensure that every shipment is optimized, routed, and billed as efficiently and cost-effectively as possible.”

It’s a beautiful dream, Jesse; you chase that dream, son.

The service has tiered pricing ranging from free to $50 per month; that’ll get most commerce/physical product startups off the ground. After you hit the 1,000 packages mark, you get bumped into a bulk pricing bracket.

Postmaster was founded in 2012 and is based in Austin, Texas.

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But for merchants, its “Fulfillment by Amazon” storing and shipping service is an offer they can’t refuse. It’s more expensive than competing fulfillment services like FulfillRite or Shipwire, but the majority of third-party sellers use Amazon’s service anyway. Why? Because Amazon tilts user feedback ratings to favor its own shipping service.

Some competing shippers are calling Amazon’s approach an unfair advantage.

According to its terms of service, Amazon reserves the right to remove negative feedback about a shipping-related issue, such as delivery delays or corrupt packaging — but only for sellers that opt-in to Amazon’s fulfillment service.

Use a competing service, or ship products yourself, and your performance metrics will reflect negative reviews about shipping and packaging (among the most common problems). Oftentimes, a fulfillment issue isn’t even a seller’s fault. For instance, stormy weather often delays mail delivery, which might lead to a spate of unearned negative reviews.

Sellers that opt-in to FBA can request that a customer service representative cross out fulfillment-related negative reviews. Unlike eBay’s elaborate takedown process, Amazon will liberally exercise this right at a merchant’s request.

Rival providers of fulfillment services claim this is stifling the growth of the business, and is an anti-competitive practice. An Amazon spokesperson declined to comment.

“It’s common knowledge that if you use Amazon’s fulfillment service, you’ll get pushed up in the search rankings,” said Joe Brieger, the director of small business at FulfillRite, which specializes in e-commerce fulfillment. To sweeten the deal, third-party sellers who choose Amazon’s fulfillment services can also offer free shipping for items over $25.

Brieger has a point: The first suggestion on a blog for Amazon marketplace sellers to avoid negative feedback? Fulfillment by Amazon (FBA). “When you utilize all the benefits of the FBA program, you will minimize a lot of the reasons buyers leave negative feedback,” the author advises.

“As a seller you are essentially handing your inventory off,” said Brieger, who told me that “they are way cheaper” but he rarely bothers to convince Amazon sellers to shift their business anymore.

Source: Screenshot

Feedback showing a negative review’s score, crossed out by Amazon.

According to Brieger, competitors in the fulfillment sector offer cost-competitive storage and processing fees as well as improved customer service. But with the option to strike out negative reviews (pictured left), “sellers feel they’re getting better rankings and doing better sales with FBA,” he said.

Despite the higher fees, Amazon’s FBA service isn’t necessarily more advanced or efficient than the alternatives. In November, critics pointed out the failings of Amazon’s fulfillment service when images appeared showing the insides of one of the company’s colossal warehouses.

With its chaotic storage system, Amazon fills every corner and crevice of its facilities with products, and it charges between $.45 and $.60 per cubic foot in storage fees. In comparison, a competitive service like FulfillRite generally charges a maximum of $.36.

Once a product has been sold, the seller faces additional charges for handling, picking and packaging, weight handling and more, which Amazon is hiking in February. Amazon has been transparent about its warehouses not being storage repositories — sellers should expect to pay through the roof if an item doesn’t sell.

The policy of tying review ratings to the use of its expensive FBA service has raised some hackles among its competitors.

“The Amazon fulfillment service has been intriguingly ‘tied’ — and I use that in the antitrust sense — to the marketplace,” said Nate Gilmore, the vice president of marketing and business development at Shipwire, a fulfillment company specializing in e-commerce.

For a seller to have a high ranking, “they must use the FBA, and the FBA is expensive,” he said. Gilmore said this policy is well documented on seller forums, and he is “surprised there hasn’t been any investigation.”

The key term here is must — is Amazon actually tying a high ranking to the usage of FBA? Tying is the practice of selling one service as the mandatory addition to another product or service. Most states have banned tying.

Charles Koob, an antitrust lecturer at the Stanford Law School, said that it would be tricky to make an antitrust case out of Amazon’s practices, given that sellers have alternatives to Amazon’s Marketplace. For precedent, he made a comparison to the recent antitrust case against Google, which was thrown out after an exhaustive, 18-month investigation.

In this case, FTC commissioners and staff rebutted the theory that Google abused its dominant market position in Internet search to favor its own products and services at rivals’ expense. The Google decision suggests it’s unlikely that a court would find Amazon guilty of taking advantage of its dominance in the e-commerce market to push its fulfillment service and quash the competition.

“Can they [Amazon] force people into something they don’t want to do? You have to prove there is no alternative,” said Koob. He speculated that this might be more of a consumer protection issue than an antitrust case.

Competing vendors in the fulfillment space certainly have an ax to grind. But perhaps more troubling is the information that Amazon keeps hidden from consumers and sellers. With negative reviews removed, they are kept in the dark about the FBA’s error rate.

When reviews are crossed out, an Amazon representative will leave behind a comment claiming to “take responsibility” for the inadequate fulfillment experience. But it also prevents anyone from finding out how many packages sold through its marketplace are fraudulent, corrupted, or delivered a few days late. An Amazon spokesperson I contacted was unaware of any such data.

High error rates are bound to happen given that Amazon regularly co-mingles products, meaning that products are jumbled together. If one of the sellers sends in a fraudulent iPad or Barbie Doll to one of Amazon’s warehouses, it’s not clear who’s responsible.

According to Koob, law enforcement agencies are still trying to get their “hands around this high-tech industry” and its intricacies. And with regulatory bodies like the FTC slowly adapting to the rapidly-changing digital landscape, grey area policies can flourish.

So for now, Amazon is probably on solid legal ground — even if its practices don’t benefit its merchants or its customers.

Photo credit: public.resource.org via photopin cc

Online retail giant Amazon is introducing its popular Prime membership program to Canadian consumers, it announced today — but it’s without numerous perks that make this service so appealing.

The move means that Canadian customers that purchase the $79 (CAD) annual subscription will have access to “free” two-day shipping on thousands of items sold by Amazon or through one of its fulfillment merchants. Prime membership also offers a one-day shipping rate of $3.99 and a standard shipping fee for all packages shipped to rural areas.

But unlike U.S. members, Canadian members won’t have access to some of the other perks that go along with the Prime service. That means no access to the library of free streaming movies on Prime Instant Video, and no access to the Kindle library lending program.

I’d imagine this has something to do with the separate licensing deals Amazon would need to cut with media companies to offer a Canadian Prime Video service. Also, it’s likely that Amazon wants to master its streaming video service domestically before it decides to expand into new markets.

Still, the product shipping discounts offered by Prime membership is still enough to carry the service on its own in Canada.

Updated at 11:37 am PT with clarification about this being a “test.”

E-commerce giant Amazon is quietly testing an $8 monthly option for its Prime program, which gives customers access to free 2-day shipping, monthly Kindle rentals, and a decent selection of unlimited streaming video.

Amazon previously only offered Prime for $79 a year, which means people concerned about that up-front pricing could try out Prime for several months to see if they get their money’s worth with the program. This new pricing option is also incredibly attractive for the holiday season, when you might want Prime benefits for just a few months.

Additionally, the change signals Amazon’s intention to be a bigger player in streaming media. The $8-a-month pricing closely resembles Netflix and Hulu Plus’ plans, but by all accounts, it offers a less robust movie and TV selection. Still, Amazon is banking on the addition of free 2-day shipping and Kindle rentals to the video streaming package to make up for its paltry options.

One caveat for those attracted to the new pricing: The $8 monthly fee ends up costing about $96 total over the course of a year. So it’s still cheaper overall to purchase a $79 yearly subscription to Prime if you feel like you get a lot of value out of the program.

Top photo: Amazon

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

When it comes to greeting cards, Apple is getting physical — meaning actually shipping them to a physical address.

The company’s new “Cards” app, which debuted at an Apple press event today, allows people to place photos taken with iOS devices into a post card or greeting card template.

“It’s a new app that let’s you create cards on your phone, and we’ll do the rest. We’ll print them out, we’ll emboss them. You can choose between 21 designs,” said Apple’s Scott Forstall.

Apple said cards mailed within the US will be tracked with the US Postal Service barcode. You’ll also get a push notification when it arrives at its destination.

The app is free, but shipping a card will run you $2.99 each. The app will go live in the App Store October 12.

Image via The Verge

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Don’t want to sacrifice your lunch break to pick up those concert tickets you bought on Craigslist? Use Postmates, a local delivery service that connects businesses with freelance messengers, instead.

Postmates launched today at the TechCrunch Disrupt 2011 conference in San Francisco. The site connects local businesses with hundreds of carriers and bike messengers who are experiencing downtime so they can hire them to make short-range shipments. The company uses an iPhone application and web applications to schedule deliveries and pickups. Couriers use iPhones to view accept jobs when they have some downtime between shipments.

“It’s for any kind of shipment, from a birthday card to a refrigerator,” Postmates co-founder Bastian Lehmann said. “Most carriers pick up an additional five jobs a day using the service.”

Most local shipments are handled by two-way radios and Craigslist. It’s a $10 billion market that’s powered by a surprisingly low-tech market, Lehmann said. The company has 30 carriers to start, and the company insures every item shipped through Postmates. The company charges $15 per shipment in San Francisco, regardless of the shipment.

“Like Uber, normally you wouldn’t take a Limo, but that app made it so easy and so convenient to do so,” Lehmann said. “We’re making it cheap, fast and convenient like Uber to open up this market to everyone else.”

Postmates was founded earlier this month and has raised $875,000. The company is based in San Francisco, Calif.

Swedish startup I-tech thinks it has a solution in the surprising form of a post-patent sedative called Selektrope. The company just received regulatory approval to sell the product in Korea, which is the world’s biggest shipbuilder and ship maintenance provider.

One of the startup’s founders, Lena Lindblad, was researching how to sedate barnacle larvae when she discovered that Selektrope had the opposite effect and hyperstimulated them. When embedded in the paint on a ship’s hull the chemical repels the larvae and prevents them from attaching.

Copper is the main paint ingredient currently used  for the same purpose, but it is toxic when it disperses in water. For this reason, the states of California and Washington have already banned copper-based paints. Commercial ships need to be repainted every 5 years, leisure craft once a year. One ounce of Selektrope can replace 500 ounces of copper. The compound can already be produced on a large scale. Some additional R&D is required with paint manufacturers in order to adapt their formulations to guarantee 3-5 years of performance.

“Our business model is to offer the chemical to the paint manufacturers together with a license to our regulatory approvals.” Lindblad explains. “Our revenues will come from license fees and sales of the chemical, which will be manufactured by contract manufacturers.”

How the cost compares with copper-based paint depends on price of copper, which varies, and has doubled to the past year. “The copper price is in the range of $3-6 per litre of finished paint. ” says Lindblad. “Selektrope will be able to compete with that price range per litre of finished paint.”

There are only a handful of marine paint companies globally. Asia, in particular Korea, China and Japan, represent 80 percent of the commercial shipping market, which makes I-tech’s recent approval in Korea and Japan a big boost for the company. China is expected to follow suit later this year. In Europe and the U.S, the pleasure boat market is more significant.

Regulatory approval in the U.S. may be some time off since Environmental Protection Agency approval takes up to 21 months, but “The US Navy bought a sample for evaluation. They are intensively looking for an Copper-free alternative” Linblad told me. Let the barnacle wars begin.

I-tech is based in Goteborg, Sweden, has been operating since 2005 and has 4 employees.

Transport is a mobile, real-time business, and this makes a mobile application more important than in other industries. Delivery drivers mostly use their cell phones for arranging deliveries (78%) and asking or answering questions (63%). uShip’s mobile app sends push notifications to drivers when a bid is accepted/declined or when users have queries, and it provides navigation features like verification of delivery addresses. For consumers, the mobile app keeps track of activity around their listing, such as questions from transporters, bids and delivery times.

Currently the mobile application is only available in the U.S., but it will be extended to Europe by the end of the year. 10% of uShip’s business is already done outside the U.S., and uShip sees international expansion as the next frontier for the business. In 2009, uShip launched localized web sites for users in Canada, the UK, the EU, and Australia. And this year the company established a European headquarters in Amsterdam. uShip had previously acquired a UK courier exchange business in the UK called BoxBee.

People in European countries tend to use transport companies more often than in the U.S. but across significantly shorter distances. This greater usage may be due to higher fuel costs or smaller cars. The transaction fees charged by uShip also vary widely between countries. Fees in the UK are 3.9% to 6.9%, while in the U.S. uShip charges 0.9% to 12.9%. The transaction fee depends on the item and the distance it is being moved.

I talked to uShip’s VP of Global Business, Shawn Bose, about the expansion into Europe. He says one of the main things uShip brings to the European market from the U.S. operation is a suite of tools built up over the years. One example is the shipping price estimator that calculates an average of what customers have paid for similar shipments (as opposed to the standard rates offered by a transport company). This is similar to seeing what customers actually paid for a standard room in a particular hotel rather than only seeing the rack rate.

Bose sees the rating and review system as another cornerstone of the business. A large transport marketplace (uShip has more than 1 million customers) contains a huge pool of aggregated knowledge about transport companies. After each transaction, customers are asked if they want to give feedback, and 60-70% of customers do. This means that transport companies that do not perform are quickly weeded out.

In the European market, uShip has competitors in the form of other transport marketplaces such as Shiply which we previously profiled. More generally, uShip sees competition in traditional methods of finding a transport company like the Yellow Pages or eMove as well as alternative means of shipping large goods like moving pods. For owner-operators who use traditional brokerage services, using uShip enables them to deal directly with the end customer, which typically means a higher margin on their services. uShip can also provide them with a new source of moving jobs.

uShip was founded in 2003 in Austin, Texas, has 65 employees and has received $5 million in VC funding.

Getting content noticed is a challenge for everyone making apps. We’ll cover the topic at DiscoveryBeat 2010. Startups and big companies alike are encouraged to submit their discovery tactics to our Needle in the Haystack competition. Early bird discounts are available until September 22. Sponsors can contact us at sponsors@venturebeat.com. To buy tickets, click here.

One of the biggest challenges faced by part-time or bootstrapped entrepreneurs who do business online is scale. Finding a warehouse storage and shipping option that grows with their business, offers flexibility, is cost effective and doesn’t distract from their marketing and sales efforts is not an easy thing to do.

Warehousing and shipping can make up about 10 percent of an e-commerce company’s costs. Other than inventory, in fact, it’s often the largest expense a retail or wholesale business faces.

Setting up a warehouse facility involves a lot of guesswork and often doesn’t give your business the flexibility it needs.  Leasing one forces you to rely heavily on sales volume estimates – and often requires cash up front, along with various other potential problems.

There is an alternative, though. Outsourced order fulfillment finds a warehouse to store your physical inventory. Then, as you receive orders and send them along, packs and ships them onto buyers.

The process allows startup owners to focus on the core parts of growing their business – marketing, sales and product sourcing – while eliminating guesswork and employee overhead. It also provides flexibility to grow, while limiting your exposure if sales slow.

Order fulfillment can be done from one warehouse or from multiple warehouses within a regional or global warehouse network. Having product stored in multiple locations can make sense if you do business on something other than a regional scale. As orders come in, they can be shipped from the warehouse closest to the end-buyer.  There are a few benefits from this:

• Lower shipping costs – You can save up to 35 percent on domestic orders and 75 percent on international ones, since the final shipment travels a shorter distance.
• No customs fees - When shipments cross borders, governments layer on customers, duties and taxes.  Bulk importing goods to an overseas warehouse allows you to sell in an international market like a local seller.
• Faster delivery - Get products to buyers in less time.
• Increased sales.  Cutting shipping times and costs allow you to grow sales and leverage winning promotions, including free shipping.

Outsourced shipping isn’t for everyone, of course. If you’re thinking about it, here are a few things to keep in mind before making the commitment.

• “Try before you buy” - Get a free trial, then send the vendor some sample inventory and ship it back to yourself.  That’s a good end-to-end test.
• Transparent pricing - Since you ‘re likely trying to get away from long-term agreements and hidden costs, watch out for long contracts, volume commitments or minimums.
• Growth Markets - Look for multiple warehouses in major markets where you can grow such as the U.S., Canada and Europe.
• Connections - If you sell online, your fulfillment provider should have a software platform that you can easily plug into your Web store such as eBay or Amazon.
• Help when you need it – Great customer support and knowledge is always important. You’re paying for the company to handle any problems that arise and you want the benefit of smart people to help your business.

Image by keltickelton via Flickr