With the curfew extended till 1st June 2020, the online sales and delivery services have one more month to make themselves a reliable name by proving to be rapid, effective and customer oriented. Once the lock down is removed, most people will return back to their normal routine and purchases, unless they are convinced to adopt the Covid-19 way of purchasing and getting delivered. You can read more about my previous post here : https://yashvinblogs.com/2020/04/14/covid-19-business-lockdown/
However, there is a price to pay to avoid going out and exposing yourself to risks.
Many companies are selling items, mostly without any promotional offers, and most often, with an unavoidable delivery fee or with at least, a minimum purchase amount in order to cover their overall costs and profits of course.
Non, nu pas bane bouriks…
I do understand that companies need to bill the client for the delivery service but sometimes, it doesn’t make sense to pay
- Rs 500 per order – Ki eter sa? P livrer par DHL?
- A delivery fee while the same service was completely free of charge before the lock down.
Since the delivery itinerary is carefully planned before hand so as to maximize resources while minimizing costs, a delivery vehicle will hence drop the maximum of orders along a specific route.
Just to have an idea, let’s assuming things for handling 20 orders :
|Delivery charge||Total delivery revenue for 20 orders|
|Rs 100||Rs 2, 000|
|Rs 200||Rs 4, 000|
|Rs 300||Rs 6, 000|
|Rs 400||Rs 8, 000|
|Rs 500||Rs 10, 000|
Let’s assume that the delivery vehicle will drive from Port Louis and go through every corner of the Plaines Wilhems district in order to delivery those 20 orders.
Verdict : For a delivery fee of Rs 100, the company will get a revenue of Rs 2, 000 daily. This amount the lowest we can expect assuming they need to pay minimum a driver, a vehicle and running costs. Now, for a company charging Rs 300 per order, they will get Rs 6, 000 per day, which looks very profitable.
Now, just imagine a delivery fee of Rs 500 per order? This is purely milking clients and makes sense only if they are dispatching a vehicle specifically for your order and not more. But we all know, that no one will do that!
Many companies encourage customers to place group orders in order to reach a minimum purchase amount, at which they can offer free deliveries.
This is very practical if you have a good neighborhood else, who will ever need 4 boxes of 12 whole chicken and 10 plates of 30 eggs?
Free delivery prior lock down and now charging delivery fees.
Some companies did have free deliveries before the lock down and the business model completely changed with the Covid-19 lockdown.
The example which comes to my mind is Winners.
A screenshot from my post about that service – Read here, written exactly a year ago :
And now, a screenshot from their web site :
So, we can note 3 points :
- Before lock down, if you purchased more than Rs 2,500, the delivery was free
- With lock down, if you purchase more than Rs 2, 500, the delivery fee is Rs 250
- Before lock down, if you purchased less than Rs 2, 500, you pay Rs 125 fixed and with the lock down, you are not allowed to purchase below Rs 2, 500.
Huh? What happened? Let’s wait for the end of the lock down to see if these delivery and range of prices are maintained.
Some fast foods (pizza and other stuffs) work like that too. They offer free deliveries as long as you are close enough to their restaurants and a small fee if you are a bit far. While most of these are still maintaining the same business models, meaning they are either charging nothing or charging the same amount for deliveries, irrespective of the lock down, several big players in the fast food industry are outsourcing their home deliveries to other companies for an additional fee.
This said, good reviews about the most known delivery companies are scarce with most people having to eat their planned lunch at dinner time.
Free deliveries brings in customers
Have you ever gone to purchase an electrical appliance for your kitchen or a set of sofa? Probably yes. And did they charge you a delivery fee? Most probably no, because if they did so, you will probably walk away.
If a company wants to continue to pursue the online shopping and delivery craze after the Covid-19 lock down, it will need to convince people that it is a time saver, cost worthy and reliable service. And if it only wants to milk people right now, you will find that their delivery service will simply disappear after the crisis, or they will just start offering free delivery.