The question “How to start your own delivery business?” is frequently googled in this era of the COVID-19 pandemic. Given how much of the economy has shifted to online, touchless, and mobile, this method of conducting business is becoming more popular. According to Statista, the global population of digital buyers has surpassed 2.14 billion people. As a result, more online businesses will cater to these customers.
This article will look at one of the most important aspects of ensuring your success when starting a delivery service: using a route optimizer. Many things can go wrong in a delivery service business, but the most serious risk is late or delayed deliveries. This article will look at how you can lower your startup risk and improve your small business’s chances of success.
Table of Contents
- Top 4 Trends in Direct-to-Consumer Services Since COVID-19 Began
- Things to Consider When Starting a Delivery Service
- Top 5 Risks When Starting a Business
- Route Optimizers Lower the Risk of Execution
- Use EasyRoutes as Your Route Optimizer Needs
Top 4 Trends in Direct-to-Consumer Services Since COVID-19 Began
The Covid-19 is characterized by a number of distinct trends. Aside from the social implications and the shifting social contract, the rise of delivery services is at the forefront. The following are some of the most significant changes that business owners have noticed:
#1 Restaurants: Rather than going out, people prefer to order in.
Clients who order food choose to have it delivered to their homes, either through Uber Eats or other local delivery services. Businesses are devoting more resources to expanding on-demand support, delivering food, and providing a better logistics experience as a result of the rising demand. For their delivery service, potential customers will now look to go mobile or online. If at all possible, a restaurant-specific delivery method is preferred. If not, they will use third-party services.
#2 Retail Businesses: Increasing customer demand
Retail also employs a greater number of delivery vehicles to serve their customers. Businesses, both old and new, are adapting to meet the new way of doing business. Some use a courier service by partnering with a courier company, while others operate their own cargo vans, box trucks, compact cars, or pickup trucks and ship under their company’s name. These companies also hire independent contractors to avoid paying for things like gas, state permits, and other regulations. Regardless of how you slice it, all retail stores must ensure that their delivery service logistics meet the expectations of their customers.
Corporations such as Amazon have partner programs to capitalize on the opportunity of increased demand. The Amazon Delivery Service Partner program, for example, gives participants access to Amazon’s technology and brand name while also allowing them to develop hands-on leaders who are their own bosses. These individuals may not be able to start their own businesses, but they can be a part of a larger organization and the retail cycle by becoming an Amazon Delivery Service Partner. Amazon does not need to hire employees; instead, it forms partnerships.
#3 Broad Trend: The size of delivery orders is increasing
In terms of restaurants and food orders, the average order size is also larger. This is true for all types of businesses, including restaurants, retailers, and any courier service – or courier service or business – that serves them. We can see how much the home and business delivery sectors have grown. That is reflected in the size of the orders.
#4 Meal Kits and Meal Delivery Kits: A new type of business emerges
The meal and meal kit delivery services have seen a lot of new customers and are in high demand. This small business makes money by preparing and selling meals (or meal kits) to customers (often repeat customers). They can either start their own delivery service or hire a courier service or courier company to make deliveries for them. This type of business has relatively low startup costs. One of the things that must be done correctly to ensure profitability is logistics. Route optimizers are an important part of the toolset for these businesses.
Things to Consider When Starting a Delivery Service
To start a business, you’ll need a lot of things. The following is a short, non-exhaustive list of things to consider in order to improve the delivery experience:
- Liability insurance: You’ll almost certainly need insurance for your own delivery service vehicles, including cargo insurance and vehicle insurance (pickup truck, hand truck, cargo vans).
- Business plan: Just like any other company, you’ll need a good name, market data, business cards, and the ability to set prices (by order or flat-rate). You must choose between forming a sole proprietorship and forming a limited liability company. Obtain a business permit. For commercial purposes, you’ll need to buy or rent a space.
- Startup costs: Depending on the business model or business structure you choose, you’ll likely incur some startup costs for equipment, vehicle, licensing, business insurance, and so on, whether you’re a service business serving others or starting a business for shipping yourself. In business, money is the name of the game. And you’ll almost certainly have to put money into it to make money.
- Equipment: You’ll need to make sure you have the right equipment for the job. A cell phone, various types of delivery vehicles (car? Pickup truck? ), hiring drivers or individual contractors, and, most likely, a computer and other useful tools are all included. You’ll be tasked with building great teams and giving them hands-on training.
- Marketing: In terms of marketing, you’ll need to have a plan in place for how you’ll reach out to your potential customer base. This could include a website, a car decal, business cards, and social media platforms. Having your own business and making your name known around town is, in fact, a lot of hard work.
Top 5 Risks When Starting a Business
- Product risk: This entails developing a product that can be presented to customers as clearly beneficial. Determine your area of expertise. This necessitates thorough customer discovery, as well as an understanding of the users’ requirements. The entrepreneur must then create an offering that satisfies the requirements. The easier part is figuring out what you’re selling. The more difficult part is adequately explaining it.
- Market risk: To mitigate this risk, you’ll need to be familiar with the industry and its major trends. Is there an increase in the number of small businesses or packages delivered in my town or area, for example? Is it possible that there are too many businesses providing the same service? Is it going to go up or down? You don’t want to end up like Blockbuster Video, which doubled down on their video rental strategy when Netflix launched direct streaming video. You should also conduct a thorough market and customer analysis. It will give you useful information about the next steps in the business development process that must be taken.
- Financial risk: For first-time entrepreneurs, there are many tools available, such as Kickstarter and Indiegogo, to help fund startup costs and marketing expenses. Friends and family, on the other hand, may be the ones who assist them. Even for a small delivery service business, you want to incur low startup costs and minimize risk by outlining key milestones, the path to profitability, and a clear plan on how to achieve these milestones.
- Team risk: In business, it is impossible to predict what will happen. As a result, it’s critical to surround yourself with a fantastic team that has the right mix of technical and strategic expertise. Mentors are also important in lowering this type of risk.
- Execution risk: This is, without a doubt, the most serious risk. Many entrepreneurs are so enamoured with their concept that they overlook the finer points of running a successful business. One of the most important aspects of a successful package delivery business is route planning and optimization in the delivery business, where you are delivering products to the doorstep with fuel-efficient vehicles. Fuel costs per delivery can be reduced with proper route planning.
This is what we’ll talk about in the following section.
Route Optimizers Lower the Risk of Execution
As previously stated, execution risk is a major cause of failure in a variety of industries. The most significant risk in the case of a company that deals with deliveries is route planning and optimization.
What is the route optimization problem?
The route optimizer problem, in two words, is that no human can manually create the stop order. This is due to the “Travelling Salesman problem,” which states that when there are ten or more stops, there are millions of options, making it impossible to choose the best route.
The importance of route optimizer software
This is why, if you have multiple stops, you should use a route optimizer. For local deliveries, MapQuest Route Planner and Google Maps are two good free options. However, if you make more than ten stops or have longer deliveries, these are insufficient. To ensure that the operation runs smoothly, more robust software is required.
Use EasyRoutes for Your Route Optimizer Needs
When delivering parcels or packages on Shopify, we strongly advise you to use EasyRoutes as your route optimizer. There are a few straightforward reasons why EasyRoutes is a good choice.
- Our route optimizer app and interface is simple to use and intuitive.
- It is integrated with your orders. No need to export and import spreadsheets.
- We are multi-platform – plan on the web and navigate your routes using the web browser on your smartphone (iPhone and Android).
- We are a route optimizer that is both cost-effective and affordable (we scale in cost when you scale in revenues). This contributes to a better overall logistics experience.
- Our technology allows you to concentrate on a greater number of addresses and customers per hour.
- We have a lot of positive feedback and support! We’ve been named a Shopify Staff Pick twice!
To avoid the risk of late deliveries, use the EasyRoutes route optimizer.
We hope this article has helped you understand some of the risks associated with starting a new delivery business and how to mitigate them. One of the biggest execution risks is not being able to deliver on time. You can rely on route optimization for this. We all know the COVID-19 pandemic is here to stay, and businesses will have to adapt. We’re here to help this burgeoning business. We will assist if there is anything we can do. Please do not hesitate to contact us if you require assistance. We wish you the best of luck, and remember to stay safe!