There is no better time than now for new delivery services to open shop. In fact, as we enter deeper into a digital world, customer expectations are going up. With better technologies, new devices, greater efficiency and lower costs of having what they want delivered at your doorstep, customers are looking for deliveries for everything from food and retail to personal and business deliveries.
And delivery companies are raking in the dollars as a consequence of great demand. The demand is coming from businesses that don’t have their own in-house delivery systems. These may be flower and gift deliveries, grocery deliveries, business offices looking for couriers to transport documents, online retail businesses delivering goods to customers.
Clearly delivery companies are cogs in the wheels of businesses that keep them running smoothly. But depending on where the delivery business is located, it makes different kinds of profits. The West and East coasts are more profitable while the Midwest and the South are not so lucrative.
But how do delivery companies make money? Let’s take a look.
How Do Delivery Companies Make Money?
Most types of delivery companies start with some initial accounts and reliable transportation. They purchase larger vehicles with the expansion of their business. The best of these pick up and deliver goods on time, providing excellent customer service. This is profitable in the long run.
Each delivery company focuses on either business or residential areas, or both. Businesses become regular customers. So, focusing on small retail outlets, office complexes, auto repair companies and small corporations is the first step to grow a profitable delivery business. Some couriers benefit by additionally carrying niche items such as medical specimens or airline tickets.
Most delivery companies charge a flat rate along with a mileage. Prices are set according to going rates for competitive services. Limiting themselves to deliveries by boxes and envelopes can help small companies to cut overheads and establish uniformity.
Initially it is not practical to setup a general Customer facing delivery company. Customers will need to deliver a variety of items to and from a large set of locations. Only large delivery companies can handle it. However it could be possible to limit the item types (for example flowers) and limit within city delivery areas for a start-up delivery company.It will need a customer facing website with an online rate calculator where general customers can place order.
When starting out, delivery businesses provide customers with incentives and price breaks to convert them into repeat customers. For instance, if the usual flat rate is $15, repeat customers may be given special rates of $10.
Making Money Through Online Food Delivery Services
An interesting variation of the traditional delivery company is the online food delivery company, which deserves a separate section of its own.
The average American spends more than $900 a year on take-out and delivery food, according to this report of a recent study. Pizzas top the list for consumer preferences, followed by burgers and then Asian takeaway. Clearly there seems to be a lot of scope for delivery companies to be making money despite tough economies.
Services like Seamless and GrubHub make it easy to order food online, through PCs and smartphones. All you have to do to place an order from your choice of local take-away joints is to look up an online menu and fill in an order form. The services offered are free. And with people storing their credit card information on their phones easily, many are choosing to use online delivery services for takeaway. These online delivery companies are paid at least 10% (or more) on each order by every participating restaurant.
Like any business, delivery companies are made profitable depending on their business plan. But the basis of a delivery business that makes money is great customer service, which helps to keep existing customers and find source new ones. A great transport service is the key to great customer service, and most reliable delivery services are aware of this.
[image credits: Lars Plougmann, micro drone from wikipedia,carolynconner ]