Thread by @marcgayle

MSMEs & SMEs that sell consumer packaged goods directly to their customer via e-commerce should include a margin in their delivery fee.

I.e. do NOT charge your customer whatever the bearer charges you. Charge more.

You aren’t greedy, but prudent.

//Thread

#FinanceTwitterJa

I am going to make a few assumptions here:

- You want to build an independent, growing, profitable business.
- You don’t have deep pockets.
- You don’t want to physically deliver yourself.
- You are doing your own fulfillment.
- You want to provide great customer svc.

I am not speaking to delivery only companies like QuickPlate, etc.

I am also not speaking to large companies that can subsidize cheap/free delivery with high margins on their products or with deep pockets.

With those out of the way, let’s dive in.

The average bearer in Kgn will charge you anywhere from $600 - $800 to do deliveries in the corporate area.

Say you have identified ‘Robby’ that has delivered a few packages for you very quickly and he generally charges you $600, do NOT charge your customer $600. Here is why...

Let’s be real, ‘Robby’ likely works for some company that owns the bike he is using, so therefore he has other work he has to do and he tries to fit you in around that primary work.

Even if he owns his bike, he has to slot you in.

As you scale, that becomes harder.

As you get more orders, you will have to start splitting between Robby & Benji. Benji may charge you $800 - $900.

So you either have to add two rates to your site, or inform each Benji customer that chose $600 they now have to pay $800, or you eat the $200 difference.

You also have to pay for the packaging that the order goes in (plastic/paper bag), which is different than the product packaging.

You have to eventually start paying someone to pick and package the orders. Right now it may be you, but assume you will need to hire someone.

If your customers are conditioned to only pay the bearer fee alone, it is very hard to raise prices without a major customer service blowback in the future.

Another key customer svc consideration is margin of error.

You will mess up an order and need to do 2 deliveries.

You can’t/shouldn’t charge your customer for something you have messed up.

Some customer will enter a Spanish Town/Portmore address and pay the Kgn Bearer fee.

Now you either have to figure out how to get the extra $1K from them just to pay the bearer or you eat it.

Or a customer wants delivery to way up Stony Hill or Red Hills or somewhere else that’s a bit far and Robby says it was $900 based on how far it was.

Or you send your bearer to do the delivery and for whatever reason (even though the customer said they would be there) they aren’t there. The bearer says he can’t wait and he brings back the package. Even worse, Robby now wants to charge you for the attempted delivery (or half).

He isn’t making an unreasonable request because he spent his time and gas and went there. It wasn’t his fault.

Assuming you want to preserve relationship with Robby, cuz biz is growing and the last thing you want to do is have to get used to a brand new bearer now, you pay.

Suppose Robby says this is too much headache and drama for him, so he stops taking your calls. You have to find a new bearer and he charges $900.

You now have to raise prices or stress out finding another bearer at $600, all while ignoring marketing and customers.

If you had no margin built in to delivery at all, then all of those costs you absorb during the course of doing deliveries come out of the margin for your product (not delivery).

Chances are, if you aren’t charging margin on delivery you don’t have enough margin on product.

The net effect of that is that you are constantly spinning your wheels, working in the company, putting in ungodly hours and are wondering why you aren’t making enough money.

It’s because of all of these small decisions. They eat away at your margin with every order.

So, in summary, if you operate in Kgn and are offering delivery in Kgn, do not charge $600 or $800.

Charge at least $1K, or even $1,300.

Life happens and you will have to make 2 deliveries for some orders or even a free delivery for a pissed off customer or something else.

You need ‘delivery margin’ to give you a margin of error so you can be flexible to give your customers the high quality customer service they deserve.

The truth is, some may not want to pay and that’s fine. Everybody isn’t your customer.

That’s why you treat every customer like they are a King or Queen. Move heaven and earth to make them happy.

In short, you provide excellent cust svc, package their product nice so it doesn’t arrive damaged, and don’t give excuses.

That’s why you need to charge properly.

I have delivered thousands of packages to customers in JA over the years, and this thread is a summary of my best insights specifically related to delivering consumer packaged goods directly to customers.

Please RT this thread so an SME owner on your TL can benefit from this thread or even just be comforted to know they aren’t greedy or doing something bad, but are being prudent entrepreneurs.

Hope this helps at least 1 person.