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5 Tips for On-Demand Delivery Start Ups

Give customers what they want, exactly when they want it!!! This is the startup formula that has gripped a generation of new budding entrepreneurs. On-demand delivery startups are ready to meet every need, from groceries to cleaning, cookies to clothes, mattress to even marijuana (if it’s legal). People want to have the ease of getting the things they want, right at their doorstep and the companies who win are the ones who will develop robust delivery management systems. If you are just starting out or even if you have been delivering for a while, here are few tips for an on-demand delivery start up to consider.

    •    Analyze the proposed delivery area: If your delivery area is sparsely populated, then you can never generate large volume from the area. Further, analyse the product you wish to deliver against the delivery area population density. The delivery area has to be densely populated with heavy demand for the service otherwise the model will break down and driver churn will increase. Postmates.com generate huge volumes for their courier fleet by offering delivery of anything. They leverage their database ensuring that someone might need food delivery now, and then some clothes to be delivered tomorrow. Think about the Peter Thiel’s toothbrush analogy for start ups- Could most customers use your product at least twice a day? If not then how are you going to ensure delivery drivers time are being maximised by staying online on your delivery platform? 

    •    Be data driven: Knowing customers' purchase behaviours at any given time or day is empowering in an age when most on-demand startups don't house their own inventory. Food delivery in Manhattan, has a heavy influx of requests around 5 pm. Does your delivery management software help you analyse this data? Does it help you automatically position your system and drivers accordingly to rapidly respond to demand.  

    •    Automate supply / demand management: At times during the day there is going to be the challenge of too many drivers and not enough orders or vice versa. To get ahead and provide absolute reliability you will need to think about adding delivery management software to your on-demand stack which would allow you to automate the supply and demand management, automate job assignment, communicate automatically with customers accurate delivery ETAs so they can also track their driver when the driver is online and in motion of the delivery. Upon every order you need to have a system in place to manage customer expectations on if drivers are available and when a realistic delivery window will occur.

    •    Ensure proper compensation for your drivers: Make sure that you properly compensate your fleet of delivery drivers for their work. Giving the right compensation for their time and distance travelled will maximise sufficient reliability on your delivery software platform. Don’t be afraid to charge your customer more during peak periods, they would prefer a choice to still use the service rather than telling them service is unavailable at that current price. If service is not available then you give them no option to or trust for them to come back and order delivery again.

    •    Maximize efficiencies and driver uptime through software: Use fleet management software to maximize efficiencies and driver uptime. Make sure your drivers have an app to accept orders and be tracked in real-time. How quickly can they call the customer if they are lost or not home? Gone are the days when delivery drivers need to rely on paper print outs. With driver apps, your couriers can now know the smartest route for the 4 deliveries in their car. As you scale you will need to remove the manual processes of job assignment, logistics management, driver performance through robust courier apps and logistics software otherwise you will remain working "in the business" and not "on the business" which will slow you down when others are scaling rapidly.

Remember people will always choose a delivery service that is reliable, responsive to demand and is concerned about customer satisfaction. Similarly even if you act as a middleman between a company, customer, and drivers, to ensure efficiency and satisfaction in your service you will need to automate our systems through delivery software and courier apps. Ask yourself, is this worth building myself or should I look at a fleet management tool, app or software that will save me money and enable me to allocate that money on acquiring more customers! 

At Swift, our vision is to help the world deliver better. Please reach out and tell us about your delivery challenges. One of our experienced staff would be more than happy to offer any free advice and suggestions to help you.