In its second-largest acquisition, Amazon buys the company for $970 million.
Growth at the family-owned apparel site has surged since launching in February.
Allison Alexander and her family have a penchant for flying, but that alone wasn’t enough to get their family-owned and operated retail site KidsFlyToo.com off the ground.
The business—selling apparel and accessories with a flying theme, like girls’ dresses imprinted with airplanes—took off fast enough when it launched in February. “We had 27 sales in the first hour,” Alexander boasts with the enthusiasm of a fledgling web merchant.
But the orders never slowed down. It wasn’t long before KidsFlyToo.com was taking hundreds of orders a day—at times 200 or more within 15 minutes after a “sneak peek” alert on the web site. Also spiking customer traffic has been exposure on Facebook and the social network’s online photo-sharing mobile app Instagram, plus efforts by Alexander to build natural Internet search results with the search optimization tools in her Shopify-hosted e-commerce site. Within a couple of months into her new venture in online retailing, Alexander, then still running a one-woman show, faced a hurdle on her runway to fast growth.
To continue growing, Alexander figured she needed time to further develop her line of merchandise while also continuing to deliver good service as she processed the flood of orders. But the family-funded business wasn’t financially ready to take on employees.
Instead, Alexander hired ShipStation. The company, itself launched only in 2010, provides an Internet-hosted software-as-a-service shipping system that Alexander says gives her the control and flexibility she needs to manage her growth while also spending time to develop a broader product line.
ShipStation is designed to integrate with a retailer’s e-commerce site—or multiple sites including e-marketplaces and comparison shopping engines that a retailer might sell through. It combines all of a retailer’s orders into a single system for printing shipping labels—from as few as under 100 per month to as many as 3,000 per day, says Jason Hodges, president and co-founder of ShipStation. The vendor’s fees range from $25 to $145 per month—the upper end covering an unlimited number of sales channels.
The basic $25 monthly fee includes the use of the built-in Endicia shipping postage service and integration with shipping carriers UPS, the U.S. Postal Service and FedEx Corp. The system will automatically show the best shipping carrier rates based on each shipment’s destination and package dimensions and a customer’s requested delivery time.
At KidsFlyToo.com, Alexander sells only through her one site. Alexander subscribes to the basic ShipStation plan plus an added level of service that, for example, lets her manually enter orders when necessary. She pays $45 per month, with the only other cost for using ShipStation the shipping label printer Alexander purchased for about $250.
The basic service also includes sending automated e-mail confirmations to customers. Another nice touch of the service, Alexander says, is the ability to e-mail return labels through the ShipStation administrative interface from any web connection, including via her mobile devices.
Prior to ShipStation, Alexander had used a shipping label system built into her online service for processing customer payments, but the system was too slow. “It would take five minutes to print a label for each shipment,” she says. With ShipStation, she adds, she can now crank out shipping labels at a rate of about 70 per minute.
Eight months into her new business, Alexander still describes KidsFlyToo.com as a small operation. Although she now has a part-time employee to help with packing orders, she still manages inventory and orders from home and personally lugs packages in her own vehicle to the Post Office or other shipping facility.
Because she’s kept staffing costs low, she says, her fledgling e-commerce business is profitable. And with her ability to process orders quickly and devote extra time to developing merchandise, KidsFlyToo has added new items its clothing line made under contract by a company in Toledo, OH.
ShipStation has also set itself up for growth, Hodges says. It provides services to more than 2,800 online sellers, providing connections to some 25 marketplaces and shopping cart platforms. To support the high volume of e-mail it handles for clients, ShipStation uses the Internet-hosted or “cloud-based” Simple E-Mail Service from Amazon Web Services, a unit of Amazon.com Inc., which enables it to quickly scale up to handle more e-mail volume when necessary, Hodges says. ShipStation also uses Amazon’s SC3 cloud-based storage, which allows the company to store large volumes of processed shipping labels for purposes such as documenting shipping insurance claims. Amazon is No. 1 in the Internet Retailer Top 500.
ShipStation also relies on Rackspace for an Internet-hosted computing power service to run its shipping services. Hodges says ShipStation chose Rackspace because it offers an extremely reliable service that uses dedicated web servers as well as a cloud environment of shared servers.