A ShipStation exec reveals why Stamps.com made the right choice in dumping the US Postal Service, why customers will buy more on Facebook and Snapchat in 2020, and the cost of not providing free returns

• Founded in 2011, ShipStation empowers online merchants of all sizes. Its web-based tool helps retailers streamline their shipping process - potentially saving hours everyday.
• Stamps.com acquired Austin, Texas-based ShipStation in 2014 for $50 million.
• As the head of industry relations and strategic partners for ShipStation, Krish Iyer has a birds-eye view of what's going on in e-commerce, where online retail is headed, and the changing nature of customer demands. Iyer previously held senior roles at FedEx, GroupOn, Pitney Bowes, and Neopost.
• We asked Iyer in a recent interview about the most interesting trends in online retail.
• Visit Business Insider's homepage for more stories.

Rachel Premack: Something I find interesting about ShipStation is that I feel like you all have a very wide reach in your marketing. I see ShipStation advertised on Bloomberg TV. I hear it on Barstool Sports podcasts.

Logistics isn't really cool at all. So, what's the tactic for ShipStation to make your brand more of a household name or something along those lines?

Krish Iyer: Our message is always around how can we help you add selling channels, things like that. I think that that message is a little different than you may see in the world of shipping.

"We're going to help you add channels and help you grow" - that's a much different value proposition than you may see out there in general. So when you have that, "Hey, let me help you make money," then who doesn't want to hear that?

What Iyer thinks about Stamps.com dumping the US Postal Service

Premack: Last February, Stamps.com ended its relationship with USPS and its leadership was really talking about Amazon's logistics network and how that's high-powered and developing quickly.

I'm curious to hear what your thoughts are on this debate of Amazon versus everybody else.

Read more: It's becoming clearer than ever that Amazon is developing a 3rd-party logistics service to edge out FedEx and UPS now that Stamps.com has dumped USPS

Iyer: I think one of the things that I think is important to realize as a trend, traditionally your carriers out there are focused a lot more on B2B packages. They're heavier, they're denser. They're probably picking up lots of packages and delivering several packages to one destination.

It's more profitable to do that. And for years, a lot of them, the e-commerce business - that may or may not be packaged the best, may have to go to a residence, may be fairly low weight - was typically handled by postal. Whereas now you're starting to see the carriers themselves saying, "No, no, no, we have to focus on e-commerce."

It's no longer just lip service saying, "Hey, the e-commerce is great."

Now it's such a fundamental part of how they're going to grow that if you can, then be that channel for them. It's a pretty strong value proposition that you can have if you can do that now that they have really signaled wanting to get into the e-commerce game.

Investors don't agree with Stamps.com's move. Its stock has plummeted from $200 a share in Feb. 2019 to just above $80 today.

Premack: But then after that announcement, we saw Stamps.com's stock go down. It's been quite a bit lower from where it was before the announcement.

Do you agree with Stamps, the decision to move away from USPS and towards Amazon?

Iyer: Absolutely.

Premack: When do you think the market will come to agree that that was the right choice?

Iyer: Quite honestly, once we start seeing a lot more of the developments in e-commerce that occur and what the carriers do specifically around e-commerce, then they'll start to see we're positioned with the customers that they want to reach.

They may now have new products and operational changes but then we have the customers, too.

Facebook, Snapchat, and other social media giants are jumping into retail, and they're poised to make billions. Iyer explains the psychological reason behind why people love to buy on social media platforms.

Premack: Speaking of B2B, could you talk a little bit about C2C e-commerce and through what that looks like? Where you see that growth going in the next few years?

Iyer: I think one of the things is, how much does the social experience power our buying habits? Obviously, all of us know about randomly searching for something and then seeing an ad. That's commonplace.

But to this day when I make certain purchases, I do crowd source in the ask on Facebook - "Hey I'm about to do X, Y, Z, what do you think?"

Read more: Google and Facebook are barging into Amazon's home turf, and analysts think they can earn billions of dollars in retail for these 4 reasons

All of us have a certain level of buyer behavior that's around the security and around justifying our purchase decision. So consumer behavior by social will certainly drive a lot of shopping habits.

It's interesting because before you would consider those things so discreet from each other, the social aspect, the buying aspect, ne'er the twain shall meet.

But now certainly Snapchat, and other platforms like them, are getting into, "How do you make that influence and that influence then can be driven around a person, product, or behavior?"

Returns are now a marketing expense, and Iyer says there's no choice but to offer them for free

Premack: Was there anything you were looking at for the holiday season that you didn't see it last year?

Iyer: I would definitely say return windows is huge. Those just saying, "Oh, make returns easy" is like saying you like grandmothers and apple pie.

What are retailers actually doing about it? They may hear it and give some lip service, but what are the actual physical actions and plans around returns that they're actually making? And the reality is a lot of them are just kind of dealing with it as it comes as opposed to having a plan. Which is not good.

I'd say the other thing is, for years merchants complained about the idea of free shipping. "Well, I'm never going to offer free shipping." And lo and behold, now you have to.

We're at the same moment where you got to look in the mirror and tell myself, "I have to offer free returns." That point has already passed. If you're saying what I would say to a retailer? That point is already passed where you must do it now. It is no longer a cost you, it's a more of a marketing expense.

Read more: UPS expects a record-breaking 2 million package returns today, and it reveals a dark truth about holiday shopping

Part of it though is, if you dig deep into the reasons for returns, we may think, "Oh, it's because of X." Like, "Okay, I've picked the wrong size, or I didn't like it." The reality is a lot of times, frankly, it's the merchant's error.

I've seen retailers that have a policy of, "Well, if it's our mistake, we'll do it." But then then that just feels ugly or it feels kind of wrong. If I just didn't like it, then am I going to lie and then say, "Oh, it didn't fit."

It's just probably easier to have a consistent free returns policy. Think of it as a marketing expense and that's it. It is what it is.