Will Lickety Ship End Differently Than Kozmo?
Michael Arrington
28 comments »
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.
Ya, but if LS can handle the last minute Xmas shoppers, then they will certainly make a name for itself. This is a service that I would definitely pay for if they can indeed deliver as quickly as they claim.
I agree, it doesn’t seem like the two are mutually exclusive
There is also a possibility that Advertisers could subsidize them.
It could be pointed out to the users during signing up, that Advertisers are helping it provide a quality low cost service. And with that in mind, they could deliver related flyers, pamphlets, free samples etc…..with orders.
Like the TechCrunch philosophy of being open, which make users more receptive.
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BTW:
That has to be one of the best logos and company names ever
Here is their original logo from spring 2005:
http://web.archive.org/web/200.....ickety.jpg
Hmmmm…..there is also a possibility that related Advertisers could subsidize them.
It could be pointed out to the users during signing up, that Advertisers are helping them in providing a quality, low cost service. And with that in mind, along with orders, they could also bring related flyers, pamphlets, free samples etc…..
Like the TechCrunch philosophy of being open, which make users more receptive.
☆ ☆ ☆ ☆ ☆ ☆ ☆ ☆ ☆ ☆ ☆ ☆ ☆ ☆ ☆ ☆ ☆ ☆
BTW:
That has to be one of the best logos and company names ever
This is their original logo from spring 2005:
web.archive.org/web/20050526000306/http://www.licketyship.com/images/top1a_lickety.jpg
Kozmo = the reason that I put on all of the weight I lost in the early 2000’s.
Want a donut? sure, 20 mins later its there. Want an ice cream? sure 20 mins its there. We had a hub only 4 blocks away, they came so fast. Want a donut an ice cream…. ah well…
I still have all the magnets they gave me with my purchases
If I remember, these services worked well in highly dense areas like NYC. Places like sf probably not so well just because of the need for the car.
History is repeating itself. In Berlin, Germany around 1900, German Emperor time, not the Fuehrer, the imperial postal services were up to 6 times daily delivery. I see LicketyShip disappearing as this german service did, but beyond that i hope there are no further historical conclusions to draw from this.
Amazing how these guys raise funds…how they withstand the scrutiny…just unbelievable….
However I am sticking to my principles…I wont predict failure…its Web 2.0 and we all need to allow things to unfold….
But this one is tough…I would also imagine they would need a store on every corner…
give me a break. out of business within 6 months.
How will they make money?
First: they do not sell anything you want. The items you can purchase is rather limited. There are three shopping categories:
* Audio - Portable (14)
* Car Accessories (23)
* Games & Toys (49)
The Kozmo difference: Kozmo would bring you anything…even a candy bar.
Second: You aren’t paying for the cheapest deal in the city…you are paying for fast/guaranteed delivery. How do they do this? LicketyShip selects the store(s) that they want to use for their business. For all we know that means they only work with Best Buy on Harrison Street. If a pizza delivery company can send you a pie for $15 (delivery included), then I’m sure that LicketyShip can make money if they are only using one (or a handful) of selected stores.
The Kozmo difference: Kozmo carried a lot of inventory. LicketyShip carries none.
Sounds like a winner to me: making money off of lazy & busy people.
There’s another site (www.maxdelivery.com) that has been doing this in New York city for a while now. They also learned from Kozmo’s mistakes and they have been charging a delivery fee, but it’s been very low.
Lickety Ship is an awesome service. If you live in the bay area there is nothing better at the moment. Sure you think 9.99 is a lot of money, but when you’re buying a $300 iPod for a Christmas present, hell yeah I’ll just sit at home in my underwear and let some body bring it to my house.
Don’t understand the complaints, sure not everyone is gonna use it, but if you’re lazy and want something fast this is a great service. Totally recommend them.
I agree with Allen (post 4) NYC is the place to do something like this because there are so many people in a concentrated area.
I may be wrong, but as I recall Kosmo was either profitable or near profitable in the NYC market. Their huge losses were mostly due to massive rushed expansion and trying to export the NYC conceived and developed business models to cities that required far more time and money to cover effectively. I would think with a reasonable volume of orders in NYC you could have a guy on a bike making several deliveries each hour which I would think would put delivery cost at a few dollars at most, and require significantly less than $20 to break even on.
it sounded goog…until i read “only ih the bay area”
Well viewing their website there is another reason they can charge only $9.99 right now, and not have to worry about taking losses. They also seem to charge a premium on the product, so are also paying probably 10% more for the product. So if you want and need it bad enough you will pay more.
Someone should do a similar service and utilize college kids / Anyone with a car willing to make some money. Obviously you have to solve the problem of trust, but if you can figure that out, all the service has to do is connect people and make a small cut.
I bet there are many folks out there that would love to earn some extra money for a very short period of time and have no other easy way to do it. Even couriers on their day off might be interested as they would get the entire fee! The site could deal with all the cash and money handling.
Just my .02 cents, loved Kozmo though, hope these guys come to Seattle soon !
As everyone has noted, this will be extremely difficult to pull off. It will be interesting if they attempt an in shopping advertising program, similar to what Amazon plans, and maybe lower that break-even point a couple of dollars.
I would utilize this service for purchasing IT hardware for business if I needed a part immediately, but not for presents.
Hrm. I don’t know if this model will work. If I needed a computer part, I would go to BestBuy or CompUSA to buy it myself.
Hm…audio, cars, and games…don’t know about that
HOWEVER, if they were shipping medical prescriptions or medical supplies within a few hours…that may be quite the business model
Their name and domain are way too long and sound funny when say it aloud. Should consider a more Web2.0 name.
Interesting. I think there’s value in here somewhere, but if one apparently very well funded company failed at this, I’d be curious how these guys will make it work.
On the shipping note, if I were in this space, I’d consider setting up an international shipping service - online shoppers located in other countries (particularly canada and UK) want very much to shop U.S.-based websites but very few ship outside of the country. Both markets (canada and UK) are still fairly underserved in terms of online shopping options within their own borders so the combined issues have created a potential demand that could easily be filled - you just have the goods shipped to you and then send it out to them. A few have tried to do this (if memory serves “shop the states” was one) but I don’t know that they had the awareness among to really jam on it.
You forgot to mention the biggest similarity between the two companies: both were started by a couple bozos who think that the internet is the place where kidz rule (go kidz!)
http://venturebeat.com/2006/11.....y-society/
To answer your question: no, it will not end differently. And the name is lame, it sounds like something my mom would come up with. Oh, and the line on the bottom of their site “a Robert Pazornik & Doug Kent joint”? I bet Spike Lee is really flattered that they lifted his line.
Don’t forget to tip the delivery guy. Anyway folks, Kozmo was a great and well planned approach and still it tanked. I think the problem is if you are getting a $250 ipod for $219 on some website for free shipping, do you wait for 2 days or say lets go licketyship. I wanna see Licketyship somehow provide savings and not just instant gratification.