For a lot of small businesses in retail, doing deliveries has become fundamental. In the hustle and bustle of many African cities, a lot of customers prefer to have their products delivered to them. The new wave of e-commerce on the continent has made this option less of a luxury and more of a regular activity. It’s awesome that customers want their orders delivered but at what cost? In most parts of Africa like Ghana, the cost of doing a delivery is often very high. High delivery costs account for more than half of abandoned carts. When a potential customer wants to buy a product and sees that the cost of delivery is almost the same as the product they are less likely to proceed. I have spoken to small business owners, delivery service providers, resource personnel, and buyers and come up with 4 fantastic ways to reduce your cost of doing deliveries. Let’s dive right in.
Bundle deliveries for specific days
When we spoke with delivery service providers most of them said that they were willing to give discounts to small businesses if they would schedule deliveries ahead of time. Time is very important to the rider. The more time available the more deliveries they can do. Picking specific days for delivery is a brilliant way for a small business to cut down costs. Let’s say you get 2 orders a day. Instead of delivering them every day you can choose Tuesday and Thursday as delivery days. The rider will pick up between 4 to 6 packages to be delivered on each of these two days. He saves time and fuel since he’s picking up only twice. If this can work for you it’s worth speaking to a delivery company about this kind of arrangement. Not all delivery companies may agree to give you a discount for this but from the data, we gathered most will so it’s a good idea to ask around.
Join a group of sellers and negotiate for better rates
As the saying goes there is strength in numbers and in this particular case, there are good discounts too. If you run a business that needs delivery services less often it’s a good idea to join a group or association to get good rates for delivery. You can literally form one yourself. All you need to do is speak to small businesses around you who will like to get lower rates for delivery services. Then choose one delivery company to work for all of you. You don’t all need to be in the same industry nor be close to each other but in my experience being in the same area helps to get even better deals! An example of this is Afrikrea.com, an online marketplace that has negotiated with DHL to get discount rates for shipping for its sellers.
Do your deliveries yourself
Sometimes it’s a good idea to consider in-house delivery. This is when a member of the business does the deliveries. This eliminates delivery companies completely. This option is sometimes more cost-effective and gives the business owner more control. In our survey, a large number of entrepreneurs complained about their dislike for how their packages were delivered. Doing this in-house will make them ensure that packages are handled properly, smooth communication with the customers and the process is easily trackable. Some riders from delivery customers also lack good customer service etiquette and therefore give customers a bad experience. This ultimately affects small businesses. If control is really important to you this option is not bad at all.
Add the delivery cost to your selling price
There are times when adding your delivery costs to the price of a product is a good idea. Almost every business that offers ‘free delivery’ pretty much does this. I personally ran a little survey on Twitter and asked people a simple question. I asked if they would prefer to buy a T-shirt for 40 cedis and pay 10 cedis for delivery or would buy the same T-shirt for 50 cedis with free delivery. A very decent majority chose the second option even though both were in essence the same. There is something magical about the word free. Free delivery, free gifts, and free bonus all sound like music to the customer’s ears. Small business owners need to do this well though. First and foremost you need to figure out the average delivery cost. You can get this lucky number by adding the cheapest you charge for delivery and the most expensive and dividing it by two. Another trick is to use the delivery fee that’s most popular. For example if most of the time you pay 20 cedis for delivery that will be the price you add to the cost of the product. Unfortunately, this doesn’t work for low-priced products. Adding the delivery cost to the product price will make the price jump a little too high. Consider selling bundles of your products or quote a minimum order quantity to qualify for free delivery. This should work just fine.
With inflation at an all-time high these days, it’s important to come up with a plan to make the best of sales and profits by reducing your delivery cost! I believe these tips can help to boost sales and also take some stress off of small business owners. If you have any questions or comments you can drop them below and I will be glad to read and answer them, good luck!
