Another firm has joined the competitive same-day delivery space, facing off against major logistics firms as it works to find a niche in moving and delivering bulky, heavy items for retailers and consumers.
Seattle-based Dolly recently expanded to serve seven large cities and has teamed with such merchants as Costco Wholesale Corp., Crate & Barrel, Lowe’s Cos. and The Container Store.
Dolly started in Chicago in 2014 but soon moved to Seattle. In 2015, it garnered $8 million in funding from Maveron, a San Francisco-based venture fund that invests in consumer-centric firms. Amazon Worldwide Consumer CEO Jeffrey Wilke was another early investor.
The Dolly mobile app connects people who need to move something, such as a couch, with an independent contractor with a truck and muscles. Consumers use the service to schedule a product delivery, move a bulky item or donate something to charity.
“We offer schedule flexibility to the customer,” Dolly Chief Operating Officer Kristin Smith said. “They can get rid of an old couch and get a new one delivered from a retailer.”
Along with same-day delivery, Dolly offers reverse logistics services to its retail partners, picking up items that the consumer has decided to return. For example, online mattress firms that offer a limited-time product test will call Dolly for pickup when the customer decides to return the cumbersome item.
Dolly competes with moving companies, but it isn’t designed to move an entire apartment or house.
“We take jobs that many movers don’t see as lucrative,” Smith said. “Small deliveries and reverse logistics are our bread and butter.”
Pricing depends on multiple factors, including the item being moved, length of the move, where it is going and when the item needs to be delivered. The price also includes payment for the mover, insurance and a profit for Dolly, Smith said.
Dolly may have an interesting concept but the challenge for a startup is to build a customer base and brand name before deep-pocketed competitors can step in and dominate the field, said Satish Jindel, owner of SJ Consulting Group in Sewickley, Pa.
“The window of opportunity is short,” Jindel said. “They must get the timing right.”
For instance, the timing turned wrong for Shyp, he said. The on-demand shipping company had early success in 2014 with its easy and inexpensive approach to shipping. But it never broke through as a major provider and in March said it would shut down.
Meanwhile, the competition is intense with heavy hitters already in, or about to get into, moving large items, Jindel said.
XPO Logistics has a hand in 13 million carrier-based deliveries of heavy goods annually, overlapping some of Dolly’s services. XPO Logistics ranks No. 1 on the Transport Topics Top 50 list of the largest logistics companies in North America.
In short, Jindel advises small disruptors, “Build it, find a buyer and move on.”
Still, Dolly offers a new approach to an age-old problem that moving companies, retailers and logistics firms hadn’t addressed. The solution includes an app, and, in many instances, same-day delivery — two features that investors are seeking.
“Our niche is a little different,” Smith said. “We seek to build [a moving industry] business that disrupts it a bit and perhaps changes it a bit.”