The concept of starting a grocery delivery business has gained massive traction in recent years. A combination of factors has facilitated the interest of the general public and startuppers. The major of them is the global pandemic.
Even though the wave of Covid-19 has decreased recently and most of the restrictions across the globe have been removed, it didn’t stop the growth of popularity among delivery apps. And there’s no reason to assume it will happen in the nearest future. Therefore, this editorial may be of great use to someone considering starting a grocery delivery service, as the article answers some of the most popular questions on the topic. Find out about types of grocery delivery businesses, the relevant monetization strategies, software development pricing, and more!
What can be considered a grocery delivery business?
Thinking about grocery delivery, most people instantly come up with a few brands like Postmates or Instacart. Yet, in reality, this market niche has a lot of room for smaller businesses and even tiny startups. The good news is if a person owns a vehicle and has established a partnership with the provider of the goods (a store, a wholesaler, etc.), it is a pretty good base for launching a delivery business.
What is the best way of starting a grocery delivery business?
There are several options to consider. All of them are valuable, but the final choice depends on the business owner’s preferences, location, budget, and multiple other factors.
1. A contract with a grocery store(s)
Partnering up with a local store (or several different shops and markets) can be a great idea, especially for businesses that are not located in larger cities. In this case, the shop will charge the customers for delivery services, and your company will be paid by the shop and entrusted to provide those services.
2. Offering delivery services directly to the customers
Another way of starting a grocery delivery service is without having to spend all the money in the world on it. Instead of looking for a provider with a well-established customer base, the entrepreneur may take it the other way around and start looking for the end clients first.
If you find people willing to pay you for delivering their groceries, eventually, you will succeed. In this case, you’ll have a choice of either starting your own company or working with an already existing brand. Both scenarios will be profitable.
3. Working with a wholesaler
This option is kind of similar to partnering with a grocery store. However, instead of working with a retail point of sale, you may choose to cooperate with a wholesaler and, in this way, “eliminate the middleman.”
The benefits include lower prices and a larger salable assortment, which is always appreciated by the customers. The only drawback you might experience is the need to find clients on your own.
4. Partnering with a delivery franchise
If the idea of growing a customer base and establishing a supply chain seems overwhelming, think about starting a grocery delivery business by joining one of the most popular delivery brands in the world. Uber Eats, Door Dash, and other successful market players are always hiring people willing to make money by delivering orders.
What kind of equipment is worth the investment?
Starting a grocery delivery service, just like any other business, will require some investment on the entrepreneur’s part. Depending on the business owner’s ambition, it can be more or less pricey. Yet, a zero spending scenario is only possible for those who are willing to make money working for a well-established delivery brand, not launch an independent company.
So what kind of equipment is essential for grocery delivery? We’ve created a list!
a. A reliable vehicle is essential. Consider buying a dependable car that is easy to fix and maintain. Most people prefer their groceries being delivered when the weather is not so great, so the chosen automobile shouldn’t cause trouble during a blizzard or heavy rain, for instance.
b. A modern, trustworthy navigation system is the key to getting places fast. It should be intuitive and accurate enough to minimize the chances of getting lost while delivering groceries all around the chosen area of service.
c. Meat, ice cream, frozen foods, dairy. The number of items that will require cooler storage during the delivery is extensive. Consider investing in some coolers that will maintain a certain temperature up until the customer receives their order.
d. What about the customers ordering not cold but hot food? Having insulated carriers will solve that problem!
e. Another important aspect of the budget is including all kinds of C&E materials. Think about gloves, masks, sanitizers, copy paper, uniforms, etc. They might not be expensive, but there’s a need to include those in the budget.
Is delivery app development necessary?
Just like with any other type of business, starting a grocery delivery service in 2022 requires at least some kind of digital platform. According to the data provided by Statista, grocery and food delivery are mostly sought-after among people 25-32 years old, who grew up with technology and spent a lot of time online on a daily basis. Therefore, if your delivery business is not reachable via the Internet, it most probably won’t succeed.
Is starting a grocery delivery business possible without developing a delivery app first? Yes. Is it the most effective way to enter the modern market and grab the audience’s attention? No.
Lack of digital representation isolates the brand from the majority of the audience and, consequently, from business opportunities and profits.
Besides that, a delivery app can bring its owners money not only by the customers’ orders but, for example, by generating ad revenue.
How much will grocery delivery software cost?
Both mobile and web application development for someone starting a grocery delivery business will come with certain expenses. Both the implementation process and post-launch support cost money. Luckily, it’s an investment the entrepreneur will be able to return as the business grows.
The cost of a grocery delivery application depends on multiple factors and can vary drastically. The average price is about USD 30k. However, depending on the entrepreneur’s choices, it can cost anywhere from USD 10k to USD 75k.
What are the aspects forming the final cost of an app? There are plenty of them!
- The development team’s location
- Is the contractor working as a freelancer or an agency
- The number of features the business owner wants to see in the app
- Does the entrepreneur require a solution both for web and mobile
- The type of application (cross-platform or native)
- Chosen tech stack
- Urgency
- The number of tech team members
Some business people may not know that, but the modern IT market is not homogenous. Even though there are teams that have the same expertise, level of experience, preferred tech stack, and even the same number of employees, they still might charge different rates for their services. That is exactly the reason for an entrepreneur to execute in-depth market research, not to rush and interview several candidates before proceeding to signing the contract and developing an application. Chances are, if one starting a grocery delivery service spends some time looking for a tech services provider with a nice price/quality ratio, one will find it.
