How to Start a Successful Delivery Business
E-commerce businesses, drop shipping, and food delivery businesses globally have led to an increased demand for reliable, affordable, and customer-centric courier and delivery service providers. So, launching a delivery business start-up or expanding your business to offer delivery service is an excellent idea!
This is an attractive prospect for you to get into because it requires very little start-up costs. In fact, you could probably start a delivery business right now with the vehicle and cell phone you have. But to run a successful delivery business, you need a lot more effort and strategy.
This complete guide on how to start and run a successful delivery business using Cartrack’s delivery fleet management system is exactly what you need to get started.
Our 5-step guide to starting a successful delivery business
The delivery sector is expanding and is projected to grow at accelerated rates over the next few years.
Here’s why you should start a delivery business:
- The increased demand and the growing e-commerce industry require reliable delivery service businesses.
- Your business could provide this service to different companies on a small and large scale.
- The initial investment and operational costs of a delivery business are relatively low.
- As your business and customer base grows, you can easily expand your fleet, services, location, and client base.
- The technology and innovations, such as fleet management systems in the logistics industry, make it a thousand times easier for businesses to run a delivery business and become successful.
Starting a delivery business is relatively easy, but growing it into a successful business will require more effort. To achieve business success, you first need to understand what goes on behind the scenes of such a business.
When you imagine a successful delivery business, what companies come to mind? Are you considering a delivery giant offering same-day express delivery or a smaller delivery business that ensures quality and timely delivery of your online orders?
Starting a successful business is no easy task. Here is what goes on behind the scenes to make your business a success:
- Aiming to ensure on-time-in-full delivery of products and orders to retailers and customers.
- Protecting brand reputation and ensuring customer loyalty and satisfaction.
- Providing the best pricing options for customers and clients.
- Real-time delivery progress, reliable order tracking, and multiple delivery options for customers.
- Happy drivers with a good work-life balance.
- A clear business goal and vision, understanding of the delivery market, and legal compliance.
Whether you are a business person looking to launch a delivery/courier business or you’re hoping to expand your business and offer delivery services to fulfil your customer’s needs, this guide will help you bring your business out of imagination into reality, and finally, business success.
Step 1: Identify your delivery business niche
The delivery business is a fast-growing market, with businesses offering food delivery, drop-shipping, gift delivery, courier service, medical equipment, supply delivery, and even after-hours delivery. The best way to start your delivery business is to first decide on your niche and prepare a business plan.
Here are five top delivery business niches worth looking at:
- Food, grocery, and alcohol delivery
This industry is projected to have a market revenue of US $2.40 billion in 2024. You can offer delivery service for restaurants, supermarkets, and liquor stores through on-demand and convenient customer services. You can also pick up and deliver or make and deliver catered meals for events, meetings, and parties through a catering delivery service.
- Flower and gift delivery
Who doesn’t love flowers and gifts? The market growth rate for this business is projected at 14.7% (2024-2028) in South Africa, with revenue reaching US $56.6 million. You can offer same-day or next-day delivery for fresh flowers and gifts for special occasions like birthdays, anniversaries, etc.
- OTC and prescription delivery
Partner with local pharmacies and offer customers reliable over-the-counter and prescription medication delivery services. The OTC pharmaceuticals market for online sales is projected to grow at a 13.68% rate annually and reach US$616.00m revenue by 2029 in South Africa and US $130.6bn by 2029 globally.
- Pet food, supplement, and supply delivery
Work with pet stores and vets or offer your own branded products to deliver food, medication, and other supplies to pet owners. Online sales of pet products are expected to grow by 11.82 annually in South Africa (8.14% globally), with a projected market volume of US$396.30 by 2029 (US$78.55bn by 2029 globally).
- Courier services
Deliver packages, documents, and other items for businesses and individuals with same-day, next-day, and more delivery options available to customers. In South Africa, this market is dominated by major players, with even global competitors influencing the market.
These quick insights into each of these niche delivery businesses in South Africa and the projected market revenue and market growth over the next few years are useful ways to understand the potential profitability of your own delivery business. The more the market demand and e-commerce industry grow in South Africa, the more opportunity there is for your business to offer a delivery service to the market.
Each industry has unique challenges, but once you’ve decided on a niche delivery service, it is easier to build a business plan detailing your mission, conduct market research, consider your financial investment, and estimate your return on investment (ROI).
Finally, remember to choose a business structure and register your business with the Companies and Intellectual Property Commission (CIPC).
Step 2: What you need to get started
With your delivery business plan and official registration from the CIPC in place, it’s time for you to invest in the necessary fleet, equipment, and other supplies for your business.
Consider making these investments for your delivery business:
- The right vehicle(s)
You’ll need the right vehicle for the job/delivery service you plan on providing and selecting the right vehicles is crucial for your delivery efficiency. Whether you decide to invest in a new or old vehicle, such as a cargo van, light-duty truck, compact car, motorcycle, or other unique vehicle is entirely up to you. Alternatively, this is also a great option if you simply use your own vehicle for deliveries. One of the most important things when choosing the right vehicle is your fleet’s operating costs, so investing in budget-friendly, low-fuel consumption and good fuel economy vehicles is important. To protect your brand image consider opting for more eco-friendly vehicles too.
- The perfect delivery drivers
Drivers play a crucial role in the success of your delivery business, and their performance and behaviour can impact key aspects of your operations from customer satisfaction to operational costs, and your brand reputation too. Training the perfect delivery drivers requires coaching to improve driver behaviour and prevent reckless driving, speeding, harsh braking and dangerous driving habits. Ensure that your drivers have the correct driver’s licence and personal insurance for their protection in the event of an accident.
- The right insurance and protection
Insurance will be your saving grace if your customer or client’s parcel or product is damaged or stolen in transit or one of your vehicle (s) is damaged or stolen. You need to secure the right insurance for your business, which may include business liability insurance, goods in transit (GIT) insurance, courier insurance, and public liability insurance. When starting your business, you will also want to add an extra layer of security, primarily to protect against vehicle and cargo theft. One of the best protections you can opt for is stolen vehicle recovery services from a company like Cartrack.
- The best technology for delivery management
Delivery management technology is your best friend for your business’s success. In addition to investing in the right vehicle, purchasing smart devices like a tablet or smartphone for drivers, and getting a GPS tracking system from Cartrack. You’ll want to add delivery service software such as Cartrack Delivery that can help you perfect delivery tracking and progress, plan the best route for drivers, automate processes, monitor your drivers, keep track of your vehicle maintenance, generate customised reports on your fleet and business and more.
Starting a delivery business is relatively easy, but growing it to be successful will require more effort. To achieve business success, you need to mitigate risks and proactively prevent the biggest challenges in delivery businesses from affecting you.
Step 3: Address the biggest challenges to your delivery business success
- Parcel management
Getting parcels to your customers’ doorstep seems easy enough right? The challenge comes with ensuring that the customer’s order is processed properly, to the correct item specifications and delivery address, and all information is properly recorded to plan the delivery logistics. Mistakes can happen more easily without adequate routing and scheduling, real-time visibility, or proper capturing of the delivery information, especially if you or your fleet manager has to complete this process manually.
- On-time deliveries
Timely delivery is essential for customer satisfaction, brand reputation, and your business’s competitive advantage. A delivery business requires efficient logistics and operational processes, as most successful companies prioritise on-time delivery. This is a brilliant way to increase sales as customers know they can trust a business that delivers their orders. Ensuring timely deliveries can be challenging for your business due to driver productivity and other delays, which can directly cost you sales.
- Fleet fuel management
Fuel is most likely the biggest operational cost your delivery businesses will face, so managing your fleet’s fuel costs will be a major challenge. High fuel costs affect your business’s profitability and the service pricing you can offer customers, making it even more difficult for you to run a successful business. You’ll have to manage the costs and fleet consumption and ensure your business’s cost efficiency.
- Driver productivity and work-force optimisation
Your drivers and fleet staff’s productivity can directly affect business sales and profitability, but how can you ensure they are productive and efficient? Operational efficiency is a major business challenge, but delivery fleet software and other technologies can help your business address this.
- Unplanned vehicle downtime
Any vehicle downtime due to maintenance, breakdowns, repairs, vehicle servicing, etc. can result in reduced productivity, financial business loss, customer satisfaction issues and even more problems for your delivery business.
- Measuring customer satisfaction
Getting client and customer feedback is important for your business, but old methods of sending surveys or completing a form can discourage customers from giving a review. Knowing how your customers feel about your delivery service is essential for improving service quality and enhancing customer experience.
- Fleet logistics management
This involves efficiently planning and coordinating delivery vehicles to optimise delivery routes and driver schedules. This is one of the biggest challenges for delivery businesses and gets more complicated as your fleet and business expand.
You may be concerned about whether your new start-up or business strategy, even with the right equipment and a good customer base, can compete with larger delivery service providers and popular third-party logistics companies, but would you believe us if we told you that there is enough cake for everyone to share in the market? What’s more, delivery technology and other innovations from companies like Cartrack make it easier for start-up businesses like yours to compete with delivery giants.
Step 4: Using technology for your delivery business
Delivery fleet management software is a top strategy for addressing your delivery business challenges and ensuring business success. At Cartrack, we’ve designed the perfect software for new delivery businesses. Cartrack delivery is an all-in-one tool equipped with cloud-based software and a mobile delivery app to optimise your delivery business and empower your drivers.
Take a look at these Cartrack Delivery features and benefits you can experience in your delivery business.
- Automated and streamlined processes: Enjoy a more efficient method of uploading driver information, and assigning jobs to drivers.
- Driver visibility: Gain real-time visibility on job progress and driver location, and intervene or communicate delivery delays. Managers can also receive updates about driver availability for new tasks.
- Route planning and route optimisation: Ensure timely delivery by arranging delivery schedules in advance based on job priority, driver availability, and shortest route. Alternatively, auto-plan your deliveries with the route optimisation feature that organises jobs in the most logical order.
- Two-way communication: Managers and drivers enjoy two-way communication, and drivers receive instant notifications when work orders are changed.
- Customer communication: Customers receive an automated notification once the driver is on the way, with a link to live track their delivery and are notified when delivery is complete.
Step 5: Establishing a good customer-base
Your business’s long-term success depends on its customer base. Once you have chosen a niche area and invested in fleet, equipment, and software, it’s time to focus on building a good customer base by providing quality service.
Here are some strategies for effectively building and maintaining loyal customers:
- Deliver a positive customer experience every time
- Focus on reliable and timely delivery
- Offer a competitive price
- Build a positive brand image and market your business with customer reviews
- Introduce a referral program for deliveries
- Participate in local community events
- Offer other value-added services to customers
- Gather customer’s feedback
Here’s how Cartrack has helped businesses like Mr Build in South Africa run a successful and well-known business with delivery.
Cartrack Case Study: Mr Build
Mr Build is a well-known hardware store specialising in woodworking, timber, cement, plumbing, and a wide range of home decor. Over the years, Mr Build has grown with a total workforce of 200 people across different branches and a fleet of about 40 vehicles that deliver building and DIY materials to customers around South Africa.
As the business expanded, Mr Build found tracking where their drivers and vehicles were during deliveries was challenging. They could not update customers on their delivery without knowing if the driver was experiencing delays, which ultimately affected customer satisfaction.
Cartrack’s fleet management software was able to help Mr Build with:
- Seeing exactly where their vehicles are at any given time and the vehicle history to see all trips completed.
- Mr Build avoids the manual and costly processes of checking up on drivers by calling to locate drivers.
- Reducing delays and unnecessary route deviations and boosting driver accountability and productivity.
- Improving customer satisfaction by updating them on the delivery process and managing their expectations.
- With the addition of CarWatch, managers get alerted the moment there is any unauthorised vehicle movement, and Cartrack’s 24-hour recovery team can respond immediately in the event of a vehicle theft. This helps them better manage risk and increase the chance of vehicle recovery during a theft or hijacking.
The manager at Mr Build, had this to say about Cartrack:
“Cartrack helps us monitor the fleet much better, I always know where all the vehicles are. There’s no part of the day where I have to look for a vehicle or driver. If I can’t get a hold of the driver, I know where the truck is.”
Mohammed Haider Yacoob – Manager, Mr Build Tzaneen
How to achieve a successful delivery business with Cartrack’s fleet management software
Our fleet management software helps businesses in several industries unlock another level of efficiency and profitability.
Beyond Cartrack Delivery, here are other tools and software services that can help you achieve a successful delivery business:
- MiFleet
Our cost and accounting software makes it easier for businesses to manage the varying financial costs of running their fleet. For your delivery business, this can help you ensure that every cent you spend on deliveries is accounted for. Track and authorise fuel costs such as driver refuelling, fuel card transactions, driver working hours, labour costs, and other costs such as repairs, services, and maintenance.
- Fuel management
Our advanced fuel management system has hardware and software that ensure your delivery fleet runs optimally and economically. Track and monitor your fleet’s fuel consumption accurately, eliminate fuel-inefficient behaviours like driver idling, route deviations, poor route planning, and identify any fuel fraud in your fleet.
- Fleet management reports
Get valuable insights into your delivery business operations with customised reports on driver behaviour and productivity, cost management, vehicle history and maintenance reports. Each of these reports can help you make data-driven decisions for your business.
- Maintenance and service reminders
Regular maintenance and servicing of your delivery fleet is the best way to prevent unexpected breakdowns, minimise vehicle downtime and costly repairs, and ensure that vehicles are always ready for delivery. See your vehicle’s maintenance history and set upcoming service reminders so you can keep up with your fleet’s maintenance. This also helps you ensure driver safety, extend vehicle lifespan, and enhance fuel efficiency.
Achieve a successful delivery business with Cartrack Nigeria
Launching a delivery business is simple, but transforming it into a profitable and successful business requires strategy.
So let’s get started; contact us for a Cartrack Delivery and fleet management software demo today.
