How to Start Delivery Business in Nigeria
Logistics, is the branch of business that involves the management of procurement, inventory, maintenance, distribution and substitution of personnel, materials, information to accomplish an organizational goal.
Logistics also involves keeping to date with all the personnels and activities involved in obtaining products and services from a seller to the consumer and also actively involved in the assembling and production processes.
There is no production involved in logistics, only the transfer of products from sellers to buyers. It entails communication with buyer, inventory, cash handling, moving of products between the merchant/seller and the buyer.
Bad logistics or delivery services can cause an E-commerce business to experience a downturn because it is a pillar on which most online businesses rely.
Konga had to separate K-express services from the main Konga online stores. Prior to that, they wanted sellers to pay before shipping their orders, but the unwilling responses led them to restrategize.
Initially, Jumia picks up items from the sellers’ location, but now sellers drop their items in any warehouse close to his/her location.
Dealdey also had a warehouse where sellers supplied products ordered online, but now it’s a matter of self satisfaction.
The list is endless. An accomplished IT personnel once declared that if logistics is gotten right, success in E-commerce is guaranteed. Numerous possibilities are available in Ecommerce logistics and delivery.
There are also specific information needed to set up a delivery business which when put into good use will guarantee financial success in the business.
Necessary Requirements for Starting Delivery Business in Nigeria
1. Get Sufficient Capital
Capital is required to set up a logistics business so as to procure man power and equipment. Capital can be as low as N300,000.
The capital can be used to purchase or build a cargo bike, mobile phone(s) for communication, stationery and other necessary items needed for documentation.
N220k to N250k can purchase a motor bike that has the plastic container used to convey products.
Motorbikes are much better especially in an environment like Lagos that is characterized with heavy traffic. After getting this you should consider hiring a rider.
2. The Roles of The Rider is Very Important
The rider is a key player in the logistics business. He should be very conversant with the delivery city/state, possess excellent phone manners (you can train him if need be) and trust worthy since he would have to handle finances and products too.
The bike rider will need to have a mobile phone to enable him contact customers. He would also need to be in constant communication with the office in the event that he needs anything.
As the business grows or when you have more capital to invest, more stationery can be obtained. Consider renting an office space, computer, software and probably more staff as needed.
From my analysis as a logistics consultant/trainer, an item can be delivered to any location within lagos for as low as N200. When delivery is done in bulk, coupled with the services of an efficient and prudent rider this price would definitely reduce.
The official price for a Lagos delivery is N500. Logistics outfit even charge higher to deliver to locations like Agege, Okoko, Ikorodu, Alaba International and other farther places. Since you are new in the business you can start with a flat rate of N500.
Merchants/Sellers can be obtained frim platforms like Kaymu, Dealdey and Konga where sellers are allowed to self fulfill. For example; 2 of my stores sell a typical 100 items monthly.
Any logistics company managing my delivery would only need to get at least 9 more customers like me and they are in business of making about 1,000 deliveries or more monthly.
An agreement is reached with Dealdey, the delivery company charges between N300 to N400 for every kg delivered to any location in Lagos. Doing the calculation, 1,000 (deliveries) X N300 (minimum delivery charged) = N300,000 translates to about N300,000 profit monthly.
Bear in mind that expenses incured like fuel, oil, bike maintenance, rider’s salary, recharge cards and miscellaneous will be deducted from the profit. With prudent management, monthly profit can be within the range of N50,000 to N150,000.
Marketing strategy should include innovative ways to contact online businesses.
3. Develop a list of the businesses in your business area that may require delivery services.
These should include local businesses as well as large organizations like grocery stores, banks, restaurants, pharmacies, flower shops, hospitals, gift shops, offices and so on.
You can additionally list senior centers and make picking up products for seniors who don’t drive part of your services. You can also include companies or businesses that may require daily delivery of breakfast and lunch.
4. Design business cards, flyers and a website for your business.
After, concluding on the services you want to render, you will need to design flyers and brochures both in hard copy and soft copy that can be sent to firms that require delivery services so as to create an awareness of your brand.
Details to be included in the website are; contact details and an online data sheet where customers can place their delivery orders.
5. In delivery business, your vehicle or motorcycle is like a mibile office.
Therefore, branding is of essence, you can purchase a magnet engraved with your business name and contact details to brand your vehicle or motorcycle.
Alternatively, you can use vinyl lettering or paint the details on your vehicle or motocycle.
6. Price your services properly
While starting up it is often thought that lowering your price makes customers demand for your service but then some class of customers rate value through price. So, ensure you price your services properly. Let your pricing be competitive enough to cover your expenses so as not to incure losses.
In the beginning stage of your business, it is advisable to work within your city limits then extending your reach when you have gained more experience in the business.
You can also contact delivery companies outside your location or state to know their charges and use the information to fix your prices.
7. Have the recipient and sender sign for their deliveries.
When items are delivered, let the recipient sign or leave a copy of their I.D cards as proof so as to prevent cases of missing packages or delivering to a wrong person. You can create a data sheet that would require both parties to sign when the item is received and delivered respectively as well as the content of the package.
Major Requirements include:
- A Cell phone
- A Computer
- Internet access
- Vehicle, motorbikes or bicycles
- Promotional materials