Business Idea

Eihli · #1 12-15-2005, 02:56 PM

I'm thinking of starting a grocery delivery/courrier service. People call in and tell you what they need and you have drivers that pick it up and deliver.

Pro's:
No competition. If I were to start a restaurant or retail outlet or etc, I would have to compete with companies that have already established a name for themself.
Low startup cost. You don't need a building or inventory. You can use your existing cars/cell phones. The only money you'd need is gas, money to buy the items, employees, and money to pay insurance and legal setup of the company.
High demand. Everyone shops for groceries and from what I gather not many people find grocery shopping enjoyable.

Cons:
A lot of people who shop don't have a ready-made list in mind. They go to the store and pick things off of the shelf as they see them.
Most of the shopping is done by mom's. Stay-at-home mom's have the time in the day to do these things themselves. Mom's who work are usually working because their family isn't pulling in enough income and probably wouldn't be able to afford a luxury like this.

Regarding the fee, I can't charge a flat fee because people who just want milk, eggs, and bread, would end up paying a huge fee for just a couple dollars worth of groceries and people who order hundreds of dollars of groceries would be paying the same amount. I can't charge a percentage because people who order just 2-3 things wouldn't make the company enough money to cover costs. So, I was thinking charge a small flat fee + a small percentage + .20c-.30c a mile in gas. With this setup in my town which is about 10 miles across, gas would be about $2-$3 per order, the fee could be around $10, and the percentage could be between 10%-15%. If the average order is $40-$60, that's about $20 per order and each order taking 30-45 minutes. That seems like a reasonable charge that many people could afford and would make the company ample profit.

As the company grows, you can add web ordering, buy your drivers gps and pda's to make ordering and delivering more efficient, and maybe make a contract with certain stores to get discounts or other benefits they might have to offer someone giving them such good business.

I'd like to hear everyones opinion on this and any ideas you might have to make it better and flaws that could cause it to fail. Thanks.

mowz · #2 12-15-2005, 03:43 PM

There are companies in major cities that already do this. Some of them have their own brand products (Schwans) and some of them will buy whatever from wherever. www.deliveryboy.com is one just off the top of my head. Most of them are not nationwide however, and you may be able to learn something about prices and their business models just by checking their websites.

Sniper · #3 12-15-2005, 03:56 PM

Have you done any market research?

PeaPod

homegrocer

freshdirect

Many attempts to do this did not survive the dot com blowup!

Eihli · #4 12-15-2005, 04:06 PM

www.wegoshop.com

Anyone have thoughts on whether it would be better to associate with one of these companies or start a new one from scratch?

Eihli · #5 12-15-2005, 04:20 PM

[ QUOTE ]
Have you done any market research?

[/ QUOTE ]

It's in progress.

MaxPower · #6 12-15-2005, 05:12 PM

I think your fees are too high.

You might also check around in your area to see if there was any competitition. Some grocery stores might already deliver.

Eihli · #7 12-15-2005, 06:10 PM

[ QUOTE ]
I think your fees are too high.

You might also check around in your area to see if there was any competitition. Some grocery stores might already deliver.

[/ QUOTE ]

Yeah I just started thinking about this yesterday so I'm sure my fees are inaccurate. I've checked around and the only grocery delivery around here is Schwan.

Uglyowl · #8 12-15-2005, 06:56 PM

[ QUOTE ]
Have you done any market research?

PeaPod

homegrocer

freshdirect

Many attempts to do this did not survive the dot com blowup!

[/ QUOTE ]

There was an article in our local paper that Roche Brother's now think it would be profitable after doing this after what they learned after their first failed attempt.

http://shop.rochebros.com/

Can't find the article, but will continue to try. 24 mechanic is the way to go for a business.

wickedgoodtrader · #9 12-15-2005, 11:13 PM

The only way an idea like this would work is if you lived ina city wth millions of people and everything si very close.. I own a business myself (lawnmowing) and it is very successful because I live in a rich area and people can afford to have their grass cut and they don't have time to do it themselves. They are also willing to pay premium prices for premium work.

We have a jam packed schedule and get an avg of about $120/hour while actually working, but we arent always working (sometimes driving) so we only gross about $800 for 10 hour day. I pay about $180 in wages a day and the rest is for me. Then a ship a bunch out to overhead which is almost paid off.. but anyway...

You can't try and run a business for $20 here and there.. you have to be CRANKIN! And if you were going to attempt it.. you can't even think about lowering your rates as you will go out of business faster then you can say chapter 11.

wickedgoodtrader · #10 12-15-2005, 11:19 PM

I was thinkin some more and figured you might be able to do it if you do what i kind of have set up.. Same people every week. They let you knwo what they need every week and you deliver it on a certain day.. that way you can shop for liek 10 people at one time then go deliver them all and save a bunch of time. You could set up routes so you deliver to certain houses that are close to eachother on the same day. You could easily handle up to 30 orders a day this way.