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Sent Items #197: Thursday, July 31, 2025

Sent Items #197: Thursday, July 31, 2025

Matthew Hertz
July 31, 2025

So close to 200! I started this newsletter November 2017, I’ve written 196 issues in the last 8 years, almost twice a month for the last 8 years. Excited for my 200th in the next few weeks!

Quick PSA: Today - this morning - at 11am EST I will be hosting a "pop up" Zoom session to discuss changes to de minimis. No info graphic prepared, just a small army of leaders in the space joining:

Aaron Rubin, Founder and CEO of ShipHero
Alex Yancher Founder and CEO of Passport
Brian Bourke Chief Commercial Office of SEKO Logistics
Casey Armstrong Chief Marketing Officer of ShipBob
Justin Sherlock Founder and CEO of Caspian

New unboxing videos out 📦 📦 📦

First one with Farmhouse Pottery:

The next one is one of Henry’s favorite dog treat brand, Bocce’s:

Let’s start with the biggest e-commerce news that broke last night:

🚨 📦 🚨 📦

BREAKING NEWS

De Minimis is over for all effective August 29 ... 30 days from now.

Effective August 29, imported goods sent through means other than the international postal network that are valued at or under $800 and that would otherwise qualify for the de minimis exemption will be subject to all applicable duties. (parcels through the International postal network won't be off the hook!)

Goods with China origin have been excluded for several months, but now all goods from all countries of origin- 4 million shipments a day or $100 billion a year of goods will now be subject to tariffs.

Between 2015 and 2024, the volume of de minimis shipments entering the U.S. increased from 134 million shipments to over 1.36 billion shipments.

Many believed (myself included!) that de minimis would still be enabled for non-China goods until July 2027. Today we learned not.

This E-Commerce Startup Slashed Its Valuation From $1 Billion To $50 Million (link): E-commerce startup OpenStore has reportedly slashed its valuation by 95% to $50 million as it looks to narrow its focus.

OpenStore was co-founded by Keith Rabois and Jack Abraham in 2021, during the second wave of the COVID-19 pandemic. The e-commerce startup’s business model initially involved acquiring Shopify sellers.

However, it will now narrow its focus on building up the menswear brand Jack Archer. OpenStore acquired the brand in 2022 for under $1 million. According to the report, the e-commerce startup helped Jack Archer increase its revenue from $1 million to $10 million in just nine months.

Why ‘Returnless Returns’ Can Pay Off for Companies (WSJ). Retailers are increasingly allowing customers to keep unwanted items and still get a refund. It isn’t just a question of costs.

It’s called a “returnless return”—when a company tells you to just keep a product instead of returning it. Retailers save money by not having to process the return.

Now a new study has found that there’s an additional reason for companies to let shoppers keep the items: It boosts customer loyalty to the brand, with customers more likely to write positive reviews, recommend the brand and repurchase an item.

The study also found that how a company frames its returnless-return policy makes a difference. For instance, highlighting the benefit to the consumer or the environment, rather than the company, makes a better impression on shoppers. What’s more, suggesting that the buyer donate the unwanted item boosts a company’s appeal.

The researchers only studied returnless returns for relatively low-cost items. But within that constraint, the positive effects were “robust” for a range of products in the study at different price points, from a ballpoint pen to a sweater.

UPS out with earnings earlier in the week and the stock tanked!

They reported a decline in quarterly profit and revenue, as demand took a hit from new “de minimis” tariffs on low-value Chinese shipments and mounting risks from Trump’s trade policies (see more on that above!)

The removal of the exemption likely creates a greater-than-expected volume headwind for the company’s international segment, as customers may cut back on discretionary online purchases, reducing shipments from bargain e-commerce sellers such as Temu and Shein on UPS’s most profitable China-U.S. trade lines.

Despite ongoing cost-cutting efforts, UPS's margins were pressured by several key factors:

The company incurred "stranded costs" due to lower-than-anticipated head-count attrition.
UPS' Ground Saver product, representing business insourced from USPS, experienced 8% more stops year-over-year, a greater amount than anticipated, which increased its cost profile.
China-US volumes down 35% y/y in May and June.Down 34.8% y/y to be precise. This was offset by volumes in China-rest of the world trade lanes increasing 22.4%, albeit that represents less profitable business for UPS (whose US-China trade lane is the most profitable).

UPS and rival FedEx are seen as bellwethers for the health of the global economy as they serve clients across industries and geographies. Below are stock performances over the last 1 year and 5 year. Look who’s doing better 👀

Thanks for reading!

- Matt

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