How does Pirate Ship make money?

  • 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.
  • Pirate Ship likely makes money on the difference between commercial shipping rates and the rates it can negotiate with carriers for sending business their way.

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.

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. For international shipping, there is also integration with the United Parcel Service (UPS) which is available in approximately 117 countries and territories.

Using Pirate Ship software, the user can import eCommerce orders from their store or marketplace, print the shipping label, and automatically post parcel-tracking information back to the store. Today, thousands of small businesses buy USPS and UPS labels with Pirate Ship daily. 

Pirate Ship revenue generation

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. 

In essence, Pirate Ship earns money from the difference between official commercial shipping rates and the unofficial, lower rate it negotiates with its partners. The difference may be as little as a few cents, so the Pirate Ship platform relies on substantial order volume to drive appreciable revenue.

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.

Main Free Guides:

Connected Business Models

SaaS Business Model

software-as-a-service-companies
The software-as-a-service (SaaS) industry has become among the largest tech industries today. Software-as-a-service describes any cloud-based application delivery and consumption business model where companies charge users a subscription fee depending on their desired level of functionality.

PaaS Business Model

paas-business-model
PaaS stands for platform as a service. Together with other โ€œas-a-serviceโ€ models, this model’s basic premise is to offer a solution to the final customer without hosting it on-premise, with complex implementations and large overhead. The PaaS model is a form of evolved cloud computing. The provider, together with virtualization, storage, network, and servers, provides middleware and runtime to the user/customer, which only handles data and applications.

IaaS Business Model

iaas-business-model
IaaS stands for infrastructure as a service. Together with other “as-a-service” models, the basic premise of this model is to offer a solution to the final customer without having to host it on-premise, with complex implementations and large overhead. The IaaS model provides virtualization, storage, network, and servers where the final user/customer will handle applications, data, operating systems, and run times.

CaaS Business Model

cloud-as-a-service
Cloud as a service is a business model that combines the cloud infrastructure delivered to customers as a subscription-based service, where the customer can access a cloud infrastructure without running it on-premise. Therefore, the whole premise of the cloud as a service business model is to offer a more agile cloud infrastructure at a fraction of the costs compared to on-premise software, which can be scaled up according to the need of the business.

AI Business Models

ai-industry

C3.ai Business Model

c3ai-business-model
C3 AI is a cloud-based Enterprise AI SaaS company. It built a set of proprietary applications (known as the C3 AI suite) that offer its clients the ability to integrate digital transformation applications with fast deployment and no overheads. C3 AI makes money primarily via its subscription services and professional fees.

Snowflake Business Model

snowflake-business-model
Snowflake is a cloud-based platform whose vision enables organizations to have seamless access to explore, share, and unlock data value to break down data silos. The company runs through a consumption-based revenue model, enhanced by its professional services. Primarily an enterprise solution, Snowflake leverages direct sales.

Palantir Business Model

palantir-business-model
Palantir is a software company offering intelligence services to governments, institutions, and large commercial organizations. The company’s two main platforms, Gotham and Foundry, are integrated at an enterprise level. Its business model follows three phases: Acquire, Expand, and Scale. The company bears the pilot costs in the acquire and expand phases and runs at a loss. Where in the scale phase, the customers’ contribution margins become positive.

About The Author

Scroll to Top
FourWeekMBA