New package express carrier competes with UPS for business while using their local delivery service.
One classic strategy for a new business is to go after a big competitor and compete on price. But sometimes companies set out to take customers away from the competition -- while at the same time being customers themselves of the competition's.
Meet ZoneSkip, a Paramus, N.J., small-package express carrier. Its premise: New Yorkers who usually use, say, UPS, pay that carrier based on the number of zones packages pass through -- eight to go coast to coast. Instead, ZoneSkip will pick up those same packages, truck them across country, and pass them off to UPS for final, local delivery. Customers save 3% to 20%, claims ZoneSkip founder Walt Mitchell.
"UPS has a lot of profit in the long distances," says Mitchell. He should know: he spent 22 years at UPS and left as national marketing manager to start this venture. Fourteen of his 15 top managers come from UPS or RPS, another competitor. And with some 100 employees, the company is on to something: Mitchell projects first-year revenues of $25 million.