Online shopping is so easy to do nowadays, and it’s boomed like never before during the pandemic. But if there’s a weak spot in the system, it’s the ubiquitous return. What do you do when you order something and it isn’t what you want?
Like DoorDash or Instacart in reverse, Pittsburgh-based startup PorchShip takes online shopping returns from your porch back to wherever it came from so customers can avoid that annoying trip to the post office or FedEx.
It’s $1.50 for a one-time pickup or 10 packages returned per month for a $9 subscription service. As a comparison, FedEx charges $4 per package for their return service.
While it solves the problem of taking unwanted packages off consumers’ hands, it also addresses another problem — opening up opportunities for delivery drivers to make more money.
“I went to deliver for goPuff and Instacart just to learn the insides of the process, and how much drivers make,” says PorchShip founder, Evgeny Kostromskoy, of Swissvale.
It wasn’t much. He thought there had to be a way to make more money.
“Why can’t these drivers take my returns?” he wondered, and earn additional income without doing extra work.
“I thought, okay, here’s a great way to increase the income for drivers, plus make my life easier and reduce the time waste for people shopping a lot online and returning a lot of stuff.”
There are a very large number of packages out there, seeking a return, at any given time.
According to Kostromskoy, 25 to 30% of items purchased online get returned. “Last year, that translated to 2.5 billion items returned,” he says. “With the growth of e-commerce, those numbers are going up.”
His wife is a prolific online shopper, and the returns just kept piling up at his house.
“Last time, she bought five pairs of shoes for my son, tried them all, kept one and four go back to Amazon,” says Kostromskoy. “We think that’s our target market. Women buy more and return more clothes for the kids.”
The process is fairly simple, he says. Go to their website, click Schedule a Pickup and type in your address. Then set your return or shipping item at your front door and PorchShip will pick it up within an hour and send you updates.
Not only can delivery drivers keep doing their DoorDash or Uber pickups but combining trips is actively encouraged. They can drop a package off and pick one up from the same house if needed.
The driver makes about $1 per package. If there is more than one package, they make more.
“According to our calculations, a driver can increase their income by 40% by doing the pickups, and by picking up multiple packages,” says Kostromskoy.
PorchShip has a growing base of users in Pittsburgh, and one driver in the San Francisco Bay Area. Currently, Kostromskoy is working on a partnership with the reverse logistics company Happy Returns and expanding to New York.
“They have most of their volume in New York, so right now I’m actively recruiting drivers in New York” says Kostromskoy, who has a few drivers there already.
Kostromskoy is from Russia originally, where he studied materials science. He got his MBA from the University of Pittsburgh and has lived here for 11 years. He previously worked in pharmaceutical logistics and founded a real estate startup that helped people sell their houses without real estate agents. It ran out of money around the time Covid started.
PorchShip was part of Startup Boost Pittsburgh a pre-accelerator program for entrepreneurs.
“It was a very short program, but I met a lot of founders there, and a lot of mentors that helped me,” explains Kostromskoy.
In the long run, he hopes to partner with retailers like Amazon.
“It’s like every day when I drop off the packages at either Amazon or UPS or the Postal Service, I always see people there. I think ‘oh my God, they’re wasting so much time.’ I think there’s a big opportunity for first-mile logistics service for the consumers.”
Still a two-person company, Kostromskoy does a lot of the pickups himself.
“I have a customer who basically requests pickups every week, sometimes a few times a week,” says Kostromskoy. “I thought people would do it monthly. But she does it consistently. It’s kind of what pushes me to keep going. There’s a demand. There are people who need this, so I need to keep going.”