Can small businesses deliver on-demand?

Managing a small business is no easy task. The times when opening a article-2-photoneighborhood cafe, bakery or grocery shop virtually guaranteed a flow of customers, many being your neighbors and extended family members are long gone. With rapid rise of corporate giants opening supermarkets, chain restaurants, beauty parlors in pretty much every neighborhood, it is becoming increasingly difficult for small and midsize businesses to compete and stay on top of the game.

Help is on the way…

Although, hope is not lost. In fact, many web-based startups come up with tools and technology to help mom and pops to compete with big brand names. Let’s take a look at some of them:

Cups, a coffee subscription app that helps New York based local coffee shops to compete with around the corner coffee giants including Starbucks and Dunkin’ Donuts.

Seoul and San Francisco based startup, Shark provides small businesses with easy to use tools to create their online advertising.

Dashride, provides small businesses with tools to let customers book, track, pay for and rate rides. “We are disrupting the disrupters” says Dashride’s founder, Nadav Ullman. One of their clients,  KES Dispatch is a local favorite taxi service in Westchester County, with just 15 drivers on call. What Dashride does is basically empower them to coordinate rides, use navigation to find the nearest drivers, track progress and connect with customers on much advanced terms. With Uber around the corner, these features are a must have.

One of Dashride’s investors, Jonathan Axelrod says there is a growing market for solutions that enable small and midsize businesses to compete in the wake of Uber and Lyft.

However, one of the main challenges small business owners face is being able to deliver on-demand following suit of UberEats and AmazonPrime to name a few. This task is a real challenge given limited resources these business owners have.  

In her interview with Forbes, Olga Vidisheva, the founder and CEO of Shoptiques.com says: “Modern day customers’ expectations are heavily influenced by industry giants such as Amazon and Uber offering prime shipping and delivery on-demand”.

Challenges ahead

Take Windy City Pizza,  a “Mom & Pop” locally owned business in Charlston, Illinois, for example. Looking for part and full time drivers, they struggle to compete with chain restaurants in delivery on-demand and technology advances.

Here are some of the challenges today’s small businesses all around the world, including Windy City Pizza face:

  1. Manual order placement- a lot of small businesses lack resources to invest in proper technology. Many, as a result, are still receiving orders over the phone. What are the chances to mix up orders, deliver to wrong addresses considering human factor and stress of rush hours?!
  2. Tracking delivery- one thing is to get customers call in for order (in the age of mobile apps), another is to ensure a smooth and fast delivery. It proves incredibly difficult to do just that without advanced delivery tracking technology. A privilege, at the moment, mostly big businesses can afford.
  3. Feedback from customers- you have a customer to call and place an order, your product is delivered to the final address, now, how much do you know about your end user’s experience? More often than not, we hear from customers when things go wrong and they take their frustration to online platforms. Often times, this harms the businesses and leaves little time to undo the damage.

Not to mention costs.

Having in-house carrier/courier to deliver on-demand is a costly affair. Depending on the business size, the country and area it operates in, the costs of having one in-house carrier can vary significantly. For instance, the minimum wage across USA goes from $7.25 up to $10.74 per hour depending on the state. The cost of having just one in-house carrier fluctuates somewhere between $290 $430 per week. In Istanbul, Turkey, an on-demand in-house carrier charges somewhere between $140 to $250 per week. Plus, businesses need more than one carrier available to deliver their products on the same day. These costs add up and can become a burden for small and mid size businesses competing with big names.  

Delivering on-demand is no easy task for anyone, including industry giant Ebay. They had to shut down their on-demand delivery service last year due to lack of interest from customers. Now, imagine the challenges smaller businesses face every day. In this consumer focused, high competitive environment small businesses are in need of any help to put them ahead of the curve.

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