Thinking of going into on-demand delivery business? Here are some of the major challenges you would (not might) face and how you can possibly combat them through tech.
Whether you’re in Gambia, Lesotho, Central African Republic, or wherever in the world; the on-demand deliver business trilemma—most especially when it comes to convenience foods, is the same.
They are: speed, profitability and affordability.
You have to wrap your head around them. First, they would be the ones wrapping your head because thinking your out would be difficult. But it’s not impossible in as much as you know your priorities and you’re comfortable with creating a balance.
Let’s begin with a similar problem: the crypto industry.
In the crypto industry, there’s something called the Blockchain Trilemma as well. It’s about how to successfully achieve security, scalability and decentralization without going nuts.
Based on the challenge posed by the trilemma, it becomes almost impossible to achieve all three high-value objectives at maximum level.
This is why:
- If a blockchain network is more secure, it most likely becomes less scalable
- If it becomes more scalable, it most likely becomes less secure
- (This is when your brain starts screaming). And when it becomes more decentralized (which is the main reason it was invented in the first place), it becomes less secure and less scalable all together
For all use cases, a balance is needed. The world is somehow designed that way.
Now in the on-demand delivery business world which spiked up in post-Covid, there’s a similar trilemma that exists particularly in the convenience foods sector.
It is also about the challenge of balancing between three parameters. In this case, they’re speed, profitability and affordability.
Usually the on-demand delivery business model deals with preordering of goods online. It is however somewhat impossible as in the crypto example above to maximize all three important factors at the same time.
This is why:
To achieve affordability, you would have to consider sacrificing either profitability or speed.
To be profitable, you may have to increase delivery charges, which messes up your affordability plan.
Gone are the days where people wait for weeks and possibly months for a package. Life is now a speed train. To deliver with speed, your business must be profitable—meaning that high charges would be retained. But then again, you know what will happen to affordability.
Well, you obviously can’t please everyone at the same time—in your humble beginnings. You have to start small—one step at a time.
And guess what? Tech is your friend. AI, robots, are your friends.
In line with Ali Ahmed‘s, TechCrunch, line of thoughts, try working with the following (although they all have their advantages and disadvantages):
- Quick commerce
- Delivery apps
- Old-age route-based food trucks (like ice cream trucks, you know them)
- Delivery robots (if you can)
By Elijah Christopher