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How to Start a Local Delivery Service

February 1, 2021
Written by Nextdoor Editorial Team
February 1, 2021 | Written by Nextdoor Editorial Team

While COVID-19 has turned many small businesses upside down, it’s also created a window of opportunity for certain sectors to thrive. With many people choosing to stay home instead of eating out or visiting brick-and-mortar retailers, the need for local delivery services has skyrocketed.

In fact, the top four food delivery apps in the U.S. saw a total revenue increase of three billion dollars. And that’s just in the second and third quarters of 2020 alone. 

The Shift in Demand 

Food delivery services aren’t the only things in demand. 

Many consumers are now relying on delivery to supply them with groceries, alcohol, and everyday essentials. National studies suggest that 21% of Americans have ordered groceries online as a result of the pandemic. Although many parts of the nation are still under COVID-19 restrictions, there are still plenty of effective ways to start an adaptive local delivery business that’s aligned with our current parameters. 

From how to determine your target demographic(s), transportation logistics, to marketing strategies, this guide will cover how to start a local delivery service that meets the needs of both your customers and your business. 

Step 1: Develop a Business Plan

You’ve decided you want to start a local delivery service. Fantastic. Now it’s time to create a business plan. To aid you in this process, we’ve highlighted a few key factors you need to focus on: 

#1 Geographic Reach

How far you’re willing to expand your reach will directly affect your delivery model. Sticking to a radius of a few miles—as opposed to delivering to an adjacent county—will influence the type of transportation needed, your overhead, and your customer base. 

To get a better idea of the delivery range that makes sense for your business model, consider the following:

  • Size and weight of your products (which often determine shipping costs)
  • Shelf-life of your products
  • How much you want to invest in route optimization services 
  • If you plan to utilize third-party delivery platforms 

#2 Order Placement and Fulfilment

Once you’ve established how big (or small) you want the scale of your local delivery service to be, the next step is establishing a reliable, user-friendly platform for customers to place their delivery orders. Determine whether you will take orders over the phone, hire a developer to create a custom platform, or sell locally online using integrated delivery software. 

In many cases, providing your customers with multiple avenues to order your products from means casting a wider—and more lucrative—net.

This is where many small businesses often turn to platforms like Seamless, UberEats, GrubHub, or Postmates to help handle order placement and fulfillment. While these companies provide useful solutions for certain small businesses, it’s important to consider the delivery fee charges and commissions that are an inevitable part of using these services. However, if you are a local business and you do not have the resources to do delivery orders yourself, these platforms can be a solid option.

The good news? In some cities like New York, local governments have implemented caps on the commissions these companies are allowed to collect in an effort to support local businesses. 

#3 Transportation 

At the end of the day, the goal of most local delivery services is simple—deliver a product to a customer’s door in great condition, as quickly as possible. There are several methods you can use to achieve this objective for your local business: 

  • Bike couriers – Relying on bike couriers is a great option for local delivery services that don’t need to move their products long distances. Biking is one of the most eco-friendly methods of transport, and your couriers won’t be at the mercy of rush-hour traffic. Using local recommendation hubs, like Nextdoor, you can find reliable bike couriers in your area and set up your own network of delivery cyclists. 
  • Delivery drivers – Utilizing a vehicle means your delivery staff (which might include yourself) is protected from the elements, and won’t be subject to physical fatigue. You should take into consideration factors like the cost of gas, car insurance, and parking.
  • Shipping companies – If your business offers a product that is shelf-stable and doesn’t need to be delivered immediately, you’ll have the option of utilizing shipping resources. 

 

Step 2: Create a Delivery-Specific Marketing Strategy 

Marketing is a key to success for many small businesses, but there isn’t a one-size-fits-all solution to developing a marketing strategy that will have your customers ordering your products time and time again. Additionally, if you haven’t offered local delivery before, there needs to be an extra emphasis on marketing.

Why? Because you might have loyal customers that are dying to have your products, only they don’t know you offer delivery. It’s time to tell them that you’re fulfilling the home delivery of products to customers! 

To jog your creative, here a few marketing avenues you should consider: 

#1 Cast a Wide Net with Social Media

In most cases, optimizing your social media strategy is the equivalent of “Marketing 101 in 2020”—and for good reason. Increasing your engagement will help you reach more customers, and keep your business at the forefront of their conversations. 

Consider these delivery-specific social media marketing ideas:

  • Live-stream a day in the life of one of your delivery couriers (while protecting your customers’ identities, of course). Highlight your delivery couriers’ commitment to quality service, speedy delivery, and community connection to help promote your business’ delivery options.
  • Host giveaways and contests for local followers living in your neighborhood. Deliver the winners’ prizes and rewards right away so your viewers can enjoy immediate gratification and forge strong bonds with your business!
  • Conduct Instagram story polls about what kind of specials your customers want to see available for delivery.
  • Provide your followers with exclusive discount codes to be used on delivery-only orders or service offerings.  

Bonus Tip: If you’re just rolling out your new local delivery service model, consider coupling the announcement with an incentive initiative. For instance, on the first day of delivery, your entire menu or product inventory could be 50% off. Or, if they recommend a friend that makes an order, both customers receive a gift card! Whatever you can do to increase the momentum of your launch, do it. 

#2 Attract Loyal Locals with Nextdoor

As useful as attracting a broad customer base can be, sometimes going local can yield impressive results. 

As a business owner, focusing on customers in your local community can often translate into building a business that’s based on a foundation of loyal, reliable support. 

Using  Nextdoor’s business tools is a great strategy local businesses can employ to reach customers in their immediate location. By creating a free Business Page, you can promote your delivery service through Business Posts and use Local Deals to incentivize nearby customers to shop more by offering a delivery discount.  Businesses can also add delivery links directly on Business Page to easily let neighbors know that option is available.Nextdoor allows you to  stay “in the know” when it comes to local conversations about your business, allowing you to tailor your service offerings to the demands of your community. 

#3 Build Small Business Solidarity

It takes a village, as they say. This often rings true when it comes to running a small business. You don’t necessarily need to view the other small business in your community as competition—in fact, they can serve as great resources to market your delivery service. Try reaching out to small businesses in your area to explore the possibilities of:

  • Setting up collaborations – Work with a fellow small business and partner up for delivery benefits. For example, if you sell artisanal candles, partner with a local bakery and offer a baked good with every candle delivery.
  • Advertising in brick-and-mortar locations – Your target customers are out-and-about every day in your neighborhood. Make sure they see your latest delivery options by going one step further and partnering with a local business to share “advertising” space in your brick-and-mortar location. They can put up a sign in their window advertising your delivery options and you can put up a sign in your window about your partner’s latest offerings and products.
  • Offering joint discounts – Double the power of discounts and help spread the word about your delivery service with a local business team-up. Offer a delivery discount for your business if customers show proof of purchase at your partner business. Have your partner business do the same for you and watch the delivery orders stream in.

Step 3: Make Your Delivery Service Stand Out 

With the pandemic causing many businesses and local restaurant establishments to pivot towards delivery, it’s easy for your business to blend into the crowd. To avoid being just another delivery service, make your business stand out by providing your customers with qualityservice they can’t get anywhere else. 

Take a look at how these businesses are thinking outside the (delivery) box:

  • Baz Bagel – This bagel shop in the heart of NYC began delivering bake-your-own bagel kits to bagel-deprived New Yorkers as the pandemic kept customers home. 
  • Love Lurra – Washington-based skincare company Love Lurra made 70% of their revenue from in-person sales before the pandemic. The company quickly pivoted to boost their online presence by investing in high-end photography to give customers the “tester” experience from home. They’re now experiencing immense success delivering their products. Their sales are stronger than ever. 
  • Leon and Son –  Brooklyn-based wine shop Leon and Son found a creative way to deliver wine to their customers’ doors as pandemic restrictions set in. The artisan wine shop began selling natural wine subscriptions to customers who joined their “Leon Club.” The company delivers its service beyond the five boroughs—Leon Club is available nationwide. 

 

A New Era of Delivery, A Pivot in Consumer Demand 

No matter what type of company you run, how far you’re willing to travel, or how you plan to get your product from point A to point B, it’s important to stay focused on how to make your customers happy. Today, that means meeting them where they’re at (more like, where they’re stuck)—at home. 

If you have the means to roll out a local delivery service (and your product is in demand), create a business plan, get the word out, and then innovate. Then, consider what you can add to your delivery that no one else has. What are customers missing? How can you fill the gap? 

In reality, they’re missing you. With local delivery, you can cure their longing and boost your bottom line. It’s a win-win. 

 

Sources: 

MarketWatch. The pandemic has more than doubled food-delivery apps’ business. Now what?. https://www.marketwatch.com/story/the-pandemic-has-more-than-doubled-americans-use-of-food-delivery-apps-but-that-doesnt-mean-the-companies-are-making-money-11606340169

Pew Research. From virtual parties to ordering food, how Americans are using the internet during COVID-19. https://www.pewresearch.org/fact-tank/2020/04/30/from-virtual-parties-to-ordering-food-how-americans-are-using-the-internet-during-covid-19/

Business Insider. Food delivery with third-party apps like Grubhub and Uber Eats is booming, but no one's making money. Here's why their business is broken. https://www.businessinsider.com/grubhub-uber-eats-postmates-third-party-food-delivery-is-broken-2020-5

Inc. 3 Lessons From Small-Business Owners on Successfully Pivoting in a Crisis. https://www.inc.com/marcel-schwantes/small-business-pivot-covid-pandemic.html


 

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Claim your free Business Page to get started on Nextdoor. For resources on how to use Nextdoor to stay connected with your local customers, pertinent news affecting business, and more, follow us at @nextdoorbusiness on Facebook

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