Gone are the days of getting in your car, driving downtown, and shopping in-person to make a simple errand. The rise of e-commerce changed everything, from the supply chain to shopper behavior and expectations.
At first, customers were simply able to make a purchase online, but had to wait two to three weeks for the item to be delivered. Delivery times began to be more efficient, shortening to one week or even a few days. Then, Amazon’s Prime membership revolutionized e-commerce by guaranteeing two-day delivery (and even supporting overnight delivery on certain products). Customer expectations around delivery times began to shift, creating new opportunities for businesses.
Today, ultrafast delivery businesses have taken off. Founded on the principles of speed and convenience, these companies deliver items to customers’ doorsteps in less than 30 minutes, and often in 10 or 15 minutes. In addition, they have a relatively low start-up cost, making them the perfect business to start in 2021.
This article will cover everything you need to know about starting a rapid delivery business. You’ll learn about the basics of rapid delivery businesses, the benefits, and the logistics and systems required.
The Basics of Ultrafast Delivery Businesses
Ultrafast delivery businesses usually sell grocery or convenience store items and have a micro-warehouse nearby that stores these products, allowing for extra fast delivery times.
Micro-fulfillment centers should house everything you need to get your order ready and out the door. It should have a place for both inventory and packaging, as well as the people who make it all happen. Businesses carry their own inventory in these micro-fulfillment centers, which result in higher profits but can also limit them to only carrying a smaller set of fast-moving items.
Take Gopuff as an example. It delivers food and drinks, cleaning supplies, home needs, OTC medication, and more, within minutes. It stores about 3,000 products in micro-fulfillment centers in strategic locations (in dense neighborhoods, for example), and charges a $1.95 flat delivery fee. These micro-fulfillment centers allow Gopuff to deliver items directly to customers 24/7 (rather than first picking up an item from the store) and avoid surge pricing by moving away from the courier service model.
The Benefits of a Rapid Delivery Business
Fast commerce businesses satisfy a major customer desire: the ability to get what they want, when they want it. And they almost always want “it” immediately.
Why it is important to your customers:
- Flexible options: Customers no longer have to drive across town to do a quick errand. Instead, they can order whatever they need from the comfort of their own home, pay for it ahead of time, and wait for it to be delivered to their doorstep.
- Great experience: When you can deliver items to customers quickly and easily, their overall experience improves.
- Brand loyalty: When customers have a great experience—like the quick, seamless delivery of essential items—your trust and credibility as a business increases.
- Customer expectations: Smartphones have created a culture of constant connectedness and instant gratification, and these expectations have carried over to customers’ shopping behaviors as well. Customers expect fast delivery, so you need to offer it to stay competitive.
Logistics, Automation, and Systems Required
Having a micro-fulfillment center (or multiple) is one of the key ingredients to a successful rapid delivery business, but it’s not the only one. In order to process transactions and deliver goods, you need to consider your digital presence and delivery infrastructure.
1. Launch a Website
You need a digital storefront to showcase your inventory and allow customers to make a purchase. Look for an easy-to-use, robust e-commerce website builder, like Shopify and WooCommerce. You don’t need to spend too much time making your website extra fancy. Instead, focus on communicating your main selling point (extra fast delivery times) and displaying product photos. You also want to clearly communicate your delivery zones to customers and, even better, allow them to enter their delivery address to see if they fall within the 15- or 30-minute delivery timeframe.
2. Accept Online Payments
As you build your website, keep in mind that many platforms will integrate with a payment processor or will offer payment services so that customers can easily make a purchase. This is an important feature since customers need to prepay for their purchase so that no action will be required at the time of delivery. Not only does this option improve the experience for your customer, but it also eliminates the need for your delivery drivers to collect payment or manage receipts.
3. Support Deliveries with Local Delivery Software
You have a way for customers to make an order and you have those items in a nearby warehouse—now, how do you get those products from point A to point B?
Delivery software removes the challenge of coordinating delivery logistics like finding drivers, managing orders, and tracking order status so that you can focus on growing your business. You can easily track your delivery orders and get your product in the hands of customers, fast. Monitor the real-time location of your drivers and order status, all from your phone or tablet via the easy-to-use dashboard.
4. Optimize Your Micro-Fulfillment Center
Your warehouse or fulfillment center won’t be too big, but it’ll be packed with fast-moving items.
Many times, your drivers will be picking up orders from the warehouse themselves and won’t be familiar with the layout or how things are organized. You may also experience driver churn and won’t have time to constantly retrain people on where items are located.
Instead, strategically organize your warehouse or fulfillment center so that people can quickly retrieve the right items. Classify inventory by category and organize them in totes and bins, use labels and signage, or display a map for easy navigation.
5. Choose the Right Mode of Transportation
Deliveries don’t have to involve cars. In fact, alternative forms of transportation can make deliveries quicker in cities where finding parking is a hassle. E-bikes and scooters are perfect for maneuvering quickly just about anywhere, and are much more affordable than investing in a fleet of cars. Walking and bicycling also work well in busy urban areas (and bicycling has the added benefit of lower insurance rates compared to cars and scooters).
Gorillas, a rapid grocery delivery service based in New York City, uses bicycles to deliver goods in less than 10 minutes. In such a densely populated area like New York City, bicycles are an eco-friendly, reliable way to make fast deliveries.
Get to know the area and choose the best transportation for it — and remember, there isn’t a one-size-fits-all approach. You may find that scooters work better in one neighborhood, while cars are a better fit in another.
Where to Start a Rapid Delivery Business
You must be able to meet your promise of a “rapid delivery,” so think carefully about which areas and neighorboods your business will serve (and make sure you have a micro-fulfillment center in each of those locations).
To deliver items as quickly as possible, opt to be near college campuses or other dense neighborhoods, and limit delivery to a two-mile radius so that you can bulk deliver items to multiple people within a short timeframe.
Many rapid delivery businesses follow this model, focusing their efforts entirely on high-density locations. For example, Gorillas delivers to New York City residents and grocery and food delivery company Getir caters to customers in major cities in Turkey. In fact, Gopuff was created on this principle, with the founders launching the company while they attended Drexel University and helping students make their 1:00am food runs more convenient.
The New Wave of E-Commerce
In a world of 24/7 connectivity, customers expect the highest level of convenience. Whether they need a dozen eggs at 6:00am or want a pint of ice cream at 11:00pm, they expect businesses to deliver. Companies that can meet these needs will flourish.