Pirate Ship makes money from the shipping carriers, not from its users: its own site says “we’re paid by the carriers, not by you”, and the software has no monthly fees, label fees or markup. Founded in Wyoming in 2014, it gives small shippers free web software to buy discounted USPS and UPS labels, and it is a licensed USPS Connect eCommerce platform. The company is private and does not publish how much each carrier pays it.
Pirate Ship's site says it is paid by the carriers and that it is one of the largest partners of USPS and UPS, authorised to offer their deepest discounts. It does not disclose the terms.
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Free to the user
Shippers pay no monthly fees, label fees, markup or minimum volumes, and no credit card is needed to sign up. For UPS, it says it passes through the full discounts.
Carriers want parcels. A platform that gathers many small shippers into one channel brings them volume they would otherwise have to win shipper by shipper.
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Cheap to acquire, cheap to serve
Pirate Ship plugs into the stores where sellers already work (Shopify, Etsy, eBay, WooCommerce, Square and others) and offers support by email and chat 14 hours a day, 7 days a week.
USPS has three price levels: Retail at the Post Office, Commercial Pricing, and Connect eCommerce, which Pirate Ship says USPS launched in 2022 and which is cheaper than Commercial Pricing. Pirate Ship says Connect eCommerce pricing is available automatically on its platform.
The headline saving
Pirate Ship says its pre-negotiated discounts save up to 89% compared with standard USPS and UPS rates. The maximum varies by service: its rates page shows up to 88% for USPS Priority Mail and 81% for UPS Ground.
Exclusive services
It promotes what it calls “secret” shipping services, such as Simple Export Rate for international parcels, which it describes as exclusive to Pirate Ship, and Priority Mail Cubic, priced by box size rather than weight up to 20 pounds.
Sellers import orders from marketplaces and shop builders, buy labels and, in integrations such as Shopify’s, mark the orders as shipped automatically. Each integration is a channel that costs Pirate Ship little and sends more parcels to its carriers.
What it isWeb app to compare rates, print labels, track parcels
Who paysFree to the user
USPS labels
What it isCommercial and Connect eCommerce pricing, including Priority Mail Cubic
Who paysShipper pays postage only
UPS labels
What it isDiscounts off UPS Daily Rates for US-origin shipments
Who paysShipper pays postage only
Shipping insurance
What it isDiscounted insurance offered in the app
Who paysOptional purchase by the shipper
Platform compensation
What it isPayment for bringing parcel volume
Who paysThe carriers
What it means for you
If you ship small volumes, compare the platform price with what you pay at the counter; the gap is the discount tier you are missing.
Ask any shipping tool who pays it. If the answer is the user, look for monthly fees or a markup on postage.
For builders: when a supplier pays for distribution, you can give the product away and still have a business.
Watch the dependency: a model paid by two carriers rests on their terms, which can change.
Check the service mix; flat-rate boxes and weight-based pricing often cost more than dimension-based options for small parcels.
The Business Engineer lens
Pirate Ship is a demand aggregator: it bundles thousands of small shippers into volume that carriers will pay for, and makes the software free to win the shipper. The Business Engineer view is that AI shopping and selling tools will create more such middle layers, and the ones that last are paid by the side that needs the volume most.
The complete explainer, cleaned up and reformatted for mobile.
Pirate Ship is a cloud-based shipping software provider for small and medium-sized businesses. The company was founded by Bjorn Borstelmann and Jameson Morris to simplify the order fulfillment process and give businesses access to cheaper shipping rates.
Pirate Ship offers its shipping software for free, with no hidden costs, monthly subscription fees, or markups.
Free Tier and Premium Plans
DescriptionPirate Ship’s software is free to use, with no monthly fees, label fees or markup. Users can create accounts and use essential shipping tools without incurring charges.
Discounted Shipping Rates
DescriptionPirate Ship partners with the shipping carriers USPS (United States Postal Service) and UPS to provide users with access to discounted shipping rates.
Shipping Insurance
DescriptionPirate Ship offers shipping insurance as an additional service to users. Businesses can choose to purchase insurance coverage for their packages to protect against loss or damage during transit.
Integration Partnerships
DescriptionPirate Ship may enter into integration partnerships with e-commerce platforms, online marketplaces, and other software providers. These integrations enable seamless connectivity between Pirate Ship’s shipping solutions and the platforms used by e-commerce sellers.
Challenges and Competition
DescriptionPirate Ship faces challenges related to competition in the shipping software space, as there are other platforms offering similar solutions. To stand out, Pirate Ship needs to continually improve its features, negotiate competitive shipping rates, and provide excellent customer support. Meeting the evolving needs of e-commerce sellers and staying cost-competitive are ongoing challenges.
Future Growth Strategies
DescriptionPirate Ship’s future growth strategies may involve: – Expanding Carrier Partnerships: Collaborating with more shipping carriers to offer a wider range of shipping options. – Enhanced Features: Continuously enhancing the platform’s features and user experience. – E-commerce Integration: Forging more integration partnerships to increase its reach and customer base.
Origin story
Pirate Ship is a cloud-based shipping software provider for small and medium-sized businesses. The company was founded by Bjorn Borstelmann and Jameson Morris in 2014.
FourWeekMBABusiness EngineerAt a glance
Pirate Ship partners with the shipping carriers USPS (United States Postal Service) and UPS to provide users with access to discounted shipping rates.
Today, thousands of small businesses buy USPS and UPS labels with Pirate Ship daily.
The platform also reduces costs for the small business owner who simply does not have the volume to negotiate better rates with postal services.
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Borstelmann and Morris founded and advised some of the first subscription box businesses. In the process, they discovered how costly and time-consuming it was to generate shipping labels for thousands of different packages.
To address this problem, they set out to create a platform that would simplify the complicated and frustrating parts of learning how to ship. This would allow small entrepreneurs to handle logistics themselves and avoid a reliance on expensive third-party fulfillment services.
The platform also reduces costs for the small business owner who simply does not have the volume to negotiate better rates with postal services. To that end, Pirate Ship partnered with the United States Postal Service (USPS) to provide access to multiple package-shipping options.
Pirate Ship offers its shipping software for free. There are no hidden costs, monthly subscription fees, or markups, and the small business owner is not even required to provide a credit card.
So how does the company make money?
Most shipping software companies charge a monthly access fee and also make money by adding markup on top of the actual postage cost. However, Pirate Ship makes money through a partnership with the USPS and UPS. The nature of this partnership is somewhat opaque, but there is a reasonable chance the company is negotiating a cheaper shipping rate with postal carriers because of the parcel volume it can send their way.
The company also claims it has built a lean business based on modern ideas to maximize its viability. Among other things, this means advertising costs are reduced with the company relying largely on word-of-mouth to acquire new customers.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
