/// ShopRunner’s Scott Thompson: We’re Building So Much More Than An Amazon Prime Competitor
Earlier this week, ShopRunner, the two-day online retail shipping service, said it had raised a giant $200 million-plus investment from Chinese e-commerce giant Alibaba and American Express. With the investment, Alibaba Executive Vice Chairman Joe Tsai joined ShopRunner’s board. The investment size was surprising for many reasons, but mostly because of how large it was and how seemingly cost-effective ShopRunner’s current model is. What in the world does ShopRunner need all that money for? ShopRunner partners with retailers and brands such as Brooks Brothers and Calvin Klein to provide free two-day shipping to ShopRunner members who shop at the partners’ online stores. ShopRunner members pay $79 a year or $8.95 a month for that privilege. The brands and retail operations handle all the packing and shipping, with ShopRunner plugging into their backend systems to make sure its members are getting their orders when promised. ShopRunner takes two to five percent of each Shop Runner-eligible purchase a member makes on partnering e-commerce sites. In return, the company attempts to prove to its retail partners that it is bringing them new, repeat customers who will spend more than non-members. I spoke this week with ShopRunner CEO Scott Thompson, who’s making a run at a redemption after after the controversy over inaccuracies on his resume forced his departure from Yahoo where he was briefly CEO. Here’s an edited version of our conversation. That’s a huge investment. Why Alibaba and why so much money? Scott Thompson: Think of this as a growth-equity type infusion. We are at right at this point where we know the product is solid, know the experience is real good and getting better by the day, we’ve launched our mobile apps and are beginning to see some early traction on that. And this month we’ll cross a million members [including some non-paying ones who’ve signed up through an American Express partnership]. With this infusion of cash, this is the perfect time for this business. I hate to say it because every startup does, but we’re at this inflection point
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