Logistics business is a kind of business that has to do with procurement, distribution, inventory, maintenance, replacement of personnel materials and information to achieve organizational goals. It involves getting products and services from a supplier or manufacturer to a consumer.
The number of Internet users in Nigeria are currently more than 100 million and more than 40% or so have done one or two online transactions within the past one year. This explains the potentials hidden in E-commerce business and it is growing in strength everyday. We are talking about now where we are facing challenges in the nation’s economy. Such challenges as a drop in the price of crude oil and the weakness of naira against dollar.
You can give any name you like to logistics business such as; door-step delivery service, bike delivery service, transportation service, dispatch rider business, they all mean one and the same thing.
E-commerce businesses are on the rise because of the rising number of Internet users. In fact business minded persons who do not have online presence are missing out and it won’t take long before everyone begins to tour this line since nobody will want to be on the losing side.
We have few online retail stores that are running services to match with the rising ecommerce growing markets examples are; Konga, Jumia, Jiji etc The advent of ecommerce and online buying of products and services have created opportunities for other key players in the sectors example is logistics business.
Almost all the Ecommerce stores depend on logistics for effective delivery. That is why when you hear that a particular online store is retrenching workers it is mostly in the area of dispatch deliveries. This can be noticeable with the way the reconstruct their orgainazations.
Before now, Jumia used to do pick up from merchants location but now merchants have to drop goods in their warehouse closest to them.
Konga used to have K-express services but has now separated it from Konga online store. They wanted clients to pay before shipping their orders but when they started getting negative response they stopped and took a different option.
Dealdey also used to have warehouse where merchants supplied real products but has now resorted to a case of self fulfillment (a do it yourself things).
WHY LOGISTICS AND DELIVERY BUSINESS
There are huge profits derived from logistics business and if you do it well, you will succeed in E-commerce business. The opportunities in delivery business is huge, many online stores keep increasing every now and then. And all or most of them requires the services of logistics business owners.
Before now clothes, shoes, agricultural products and services where available in online market. But now we are face to face with cooked food delivery business. That is why you will make good money in logistics business.
HOW TO START A DELIVERY BUSINESS IN NIGERIA
Get an office space, purchase a bike (200c) as recommended by Lagos State Government. Enquire to know what is obtainable in your location if you are not in Lagos. Write a letter to the State Ministry of transportation to collect okay pepper, this paper is an inspection by VIO. You will be required to bring the bike for inspection before the paper can be given to you.
After receiving the paper you can then register with any vehicle registration centre that is close to you. Draw out your logistics business plan as it fits your country Nigeria or anywhere you are. Bike delivery business is lucrative but you have to know the pros and cons before you start.
To get permit to do logistics business you need State Government. But when you want to start couriet business you have to get licence from Nipost. The money for logistics permit is just a few thousand while that of courier is in millions.
EQUIPMENT FOR LOGISTICS BUSINESS
- Cargo bike
- Mobile phone
- Items for keeping records
- Dispatch box
STEPS TO START LOGISTICS BUSINESS
Consider these things:
- Social media platform
- Dispatch riders
- Business plan
- Get licenced
CAPITAL FOR STARTING LOGISTICS BUSINESS
Logistics business requires a reasonable amount of money for the purchase of equipment and for man power but with #400,000 you can start the business. #360,000 can purchase a good bike and equipped with plastic container for the products carriage.
Bike is very convenient for logistics business because it can easily move around traffic (meander its way in and out of traffic) than a car would have done. Run a comprehensive insurance on the bike to avoid situations in case of eventuality. Delivery box is #26,000. You can buy in Oyingbo if you are in Port Harcourt.
DISPATCH BIKE RIDER
After the motorbike, the rider is another most important person to consider. Because without a good rider logistic business may crash.
- He must be someone who knows the nook and crannies of the area to be covered.
- Must be someone who is ready to work and have good manners including phone manners.
- Since he will be handling cash and other products, he must be very honest.
Phone is needed for communication with the buyers. So give the rider one phone to create contact with the buyers and to also communicate with you when the need arises.
You can start from the comfort of your home, however to make it official and serous you can acquire a space for it and employ one or two staff.
SOCIAL MEDIA PLATFORM
Use social media platform to attract more econmerce stores and online merchants. Use Facebook, Instagram, twitter and website to tell people about your logistics business. In fact people looking for your kind of services can easily find you.
BUSINESS PLAN FOR LOGISTICS BUSINESS
Don’t fail to draw a business plan for your delivery business. It should include areas to cover, amount to start with and projection for the future.
HOW TO SET CHARGES IN LOGISTICS BUSINESS
Let’s take Lagos delivery for instance; you can deliver goods anywhere in Lagos at the cost of #200. But a typical delivery in Lagos cost #500 and logistic outfit charges more. For a start you can charge #500 as a flat rate for any location. Since you will be delivering in volume the cost can be spread out.
But as the number of customer increases you can then set different charges according to locations.
PROFITS IN LOGISTICS BUSINESS
Assuming you have about 10 businesses that uses your service and each sales 100 items averagely in a month. This means in a month you will have 1,000 deliveries. If you enter agreement with the companies to charge #400 for 1kg of item to deliver around Lagos or your location, in a month you will realize #400,000 for 1,000 items delivered.
By the time you deduct expenses like; fuel, recharge cards, engine oil, salary, bike maintenance maybe plus miscellaneous you will have about #200,000 as a take home pay for a month.
CHALLENGES OF LOGISTICS BUSINESS
Factors that affects ecommerce deliveries are:
- People make orders for what they don’t want or change their minds about it. And will refuse to pick your calls when you have reach their location. Thereby wasting your time and fuel money.
- Some customers have attitudes, they will tell you the item you brought is not the same with what the saw online. As because of that you can’t claim your money because they wouldn’t pay.
- Unnecessary delays from some of the clients when you go for deliveries. And you will end up delivery less than your target for the day.
Advertise your logistics business both online and offline. Look for ways to get to online merchants and individuals that sell products on social media platforms.
Reach out to companies, agencies and businesses that will require your services. Some of those outfits include; Kaymu, Dealdey, Konga and online food vendors, where merchants are allowed to self fulfil.
People who are into importation business need the services of a dispatcher the most. And also courier companies for dispatching parcels. That is why logistics business is an evergreen business. It is yet to be crowded and will take a very long time if at all that will happened.
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