Welcome, Guest: Join Nairaland / LOGIN! / Trending / Recent / New
Stats: 2,488,364 members, 5,640,979 topics. Date: Friday, 05 June 2020 at 11:49 AM

Starting Your Own Logistics/ Delivery Outfit With Less Than 300k - Business - Nairaland

Nairaland Forum / Nairaland / General / Business / Starting Your Own Logistics/ Delivery Outfit With Less Than 300k (39025 Views)

Tony Elumelu Rocks Michael Jackson's Outfit To Xmas Party - Pictures / 6 Tips To Starting Your Own Business / Dangote In Casual Outfit At Lagos Polo Club (Photos) (2) (3) (4)

(1) (2) (3) (4) (Reply) (Go Down)

Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by DealFinder(m): 3:37pm On Feb 17, 2016
Nigeria currently has about 90 million internet users, out of which half have carried out at least 1 online transaction within the past 12 months. A clear picture of the potentials in Ecommerce business and the growth prospects. This is even as the economy seems to be contracting due to fall in crude oil prices, and the crashing of the naira against the dollar.

Statistics like these have given rise to a number of Ecommerce businesses rising to service this growing market. Online retail stores and marketplaces are a common site, and anyone can mention some of them off the top of the head. With these come opportunities for other players in the sector, and one such opportunity is logistics.

It may surprise you to note that the bane of most Ecommerce stores is logistics. When you hear that an online store is downsizing, laying off staff, retrenching, the root cause most often is logistics. And it is always obvious in the way they eventually restructure their organization.

First it was Konga, where they separated K-express services from the Konga online stores. They had initially wanted merchants to pay before shipping their orders, but the negative response made them change their mind. Jumia used to do pick up from the merchants' location, but now you have to drop off in their warehouse closest to you. Dealdey had a warehouse where merchants supplied products ordered, but now it's a case of self fulfillment.

The list goes on and on. An experienced IT personnel once stated that if you can get logistics right, you'll do excellently in Ecommerce. There are huge prospects in Ecommerce logistics and delivery. I would like to highlight certain information required to get you started in this business, and if properly managed, will ensure financial success.

Logistics, simply, is the branch of business that deals with the management of procurement, distribution, inventory, maintenance and replacement of personnel, materials, information to achieve an organization's goal. It deals with all the actors and activities involved in getting products and services from a supplier to the consumer. It is also actively involved in the manufacturing and production processes.

However, logistics in Ecommerce does not include production, just the movement of products and services from the seller/ merchant to the buyer. It includes information/ communication with buyer, movement of products, inventory, cash handling, between the seller (or outsourced logistics/ delivery outfit) and the customer.

Logistics requires quite a substantial outlay of capital for equipment and man power, but a scaled down version can be started with less than N300,000. With this amount, you can buy or build a cargo bike, get mobile phone(s) for communication, stationery and other items needed for keeping your records.

With between N220k to N250k, you can get a good motorbike equipped with the plastic container to carry the products. Driving around Lagos is quite hectic, but with motorbikes, one can easily meander through the traffic. After the motorbike, the rider is the next most important factor to consider.

The rider is so important that the person you choose may make or mar the project. The rider has to be ready to work, conversant with Lagos cities, possess good phone manners (you'll have to train him), must be honest cause he'll handle cash, and also products.

You need at least 1 mobile phone for the rider to make contact with the buyers. If you're the one managing the outfit, you'll also need to be in constant touch with the rider in case the need arises. Other stationery can be acquired along the way. If you have more to invest, you can consider getting a space, computer, software and 1 or 2 more staff.

From my discussions on a logistics trainer/ consultant, it is possible to deliver an item anywhere in Lagos at the cost of N200. With the added benefit of delivering in volumes, this cost can be conveniently reduced as the cost would be spread out. If you have a smart and efficient rider, you can considerably reduce overhead expenses.

A typical Lagos delivery cost N500. The logistics outfit charges that much to deliver around the state. Some charge more to deliver at the extremes of Lagos eg. Ikorodu, Agege, Okoko, Alaba International. As a new entrant, you can maintain a flat rate of N500 for the time being.

Good places to get sellers who will use your service are Konga, Kaymu and Dealdey, where merchants are allowed to self fulfill. For instance, 2 of my stores sell an average 100 items monthly. The delivery outfit handling this just needs to get 9 more customers like this, and they're sure of about 1,000 deliveries monthly.

There's an arrangement with Dealdey, and the delivery company charges between N300 to N400 for 1kg delivered around Lagos. That translate to

1,000 (deliveries) X N300 (minimum delivery charge) = N300,000

monthly in revenue. Of course expenditures like fuel, oil, recharge cards, bike maintenance , rider's salary, miscellaneous will be deducted from revenue. If you're able to beat down cost efficiently, it's possible to go home with between N50,000 to N150,000 a month.

For your marketing, you have to devise creative ways to reach out to online merchants. You are only limited by your imagination.

28 Likes 2 Shares

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by NwabuezeWini: 4:28pm On Feb 17, 2016
Nice idea

1 Like 1 Share

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by millhouse: 9:25pm On Feb 17, 2016
Thumbs up
Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by ojoyentalk: 9:33pm On Feb 17, 2016
Nice tip
Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by mrsage(m): 12:06am On Feb 18, 2016
Good idea
Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by JomaxGlobal: 12:40am On Feb 18, 2016
Delivery is the hardest nut to crack for Nigeria's ecommerce practitioners. The postal service that has the infrastructure to drive ecommerce delivery is just not ready. Even the existing delivery companies are yet to provide for the vagaries of ecommerce delivery. As ecommerce practitioners ourselves, we have battled with various options but they just do not meet the quality of the service we seek to provide our customers. Our response is to build our own delivery framework that will serve us and other merchants. This will launch February 29, 2016.

3 Likes

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by DealFinder(m): 10:20am On Feb 19, 2016
Why did I put up this thread?

To get people more aware about this need that needs to be filled. And considering the fact that it doesn't take as much money as previously thought to set up.

Secondly, and very importantly, I'm in need of a logistics outfit that can handle my teeming orders, as it seems that the current one I use isn't as efficient as it used to be. Especially with our Ecommerce store set up with lots of orders to handle

4 Likes

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by Demmah: 11:56am On Feb 29, 2016
DealFinder:

Nigeria currently has about 90 million internet users, out of which half have carried out at least 1 online transaction within the past 12 months. A clear picture of the potentials in Ecommerce business and the growth prospects. This is even as the economy seems to be contracting due to fall in crude oil prices, and the crashing of the naira against the dollar.
Statistics like these have given rise to a number of Ecommerce businesses rising to service this growing market. Online retail stores and marketplaces are a common site, and anyone can mention some of them off the top of the head. With these come opportunities for other players in the sector, and one such opportunity is logistics.
It may surprise you to note that the bane of most Ecommerce stores is logistics. When you hear that an online store is downsizing, laying off staff, retrenching, the root cause most often is logistics. And it is always obvious in the way they eventually restructure their organization.
First it was Konga, where they separated K-express services from the Konga online stores. They had initially wanted merchants to pay before shipping their orders, but the negative response made them change their mind. Jumia used to do pick up from the merchants' location, but now you have to drop off in their warehouse closest to you. Dealdey had a warehouse where merchants supplied products ordered, but now it's a case of self fulfillment.
The list goes on and on. An experienced IT personnel once stated that if you can get logistics right, you'll do excellently in Ecommerce. There are huge prospects in Ecommerce logistics and delivery. I would like to highlight certain information required to get you started in this business, and if properly managed, will ensure financial success.
Logistics, simply, is the branch of business that deals with the management of procurement, distribution, inventory, maintenance and replacement of personnel, materials, information to achieve an organization's goal. It deals with all the actors and activities involved in getting products and services from a supplier to the consumer. It is also actively involved in the manufacturing and production processes.
However, logistics in Ecommerce does not include production, just the movement of products and services from the seller/ merchant to the buyer. It includes information/ communication with buyer, movement of products, inventory, cash handling, between the seller (or outsourced logistics/ delivery outfit) and the customer.
Logistics requires quite a substantial outlay of capital for equipment and man power, but a scaled down version can be started with less than N300,000. With this amount, you can buy or build a cargo bike, get mobile phone(s) for communication, stationery and other items needed for keeping your records.
With between N220k to N250k, you can get a good motorbike equipped with the plastic container to carry the products. Driving around Lagos is quite hectic, but with motorbikes, one can easily meander through the traffic. After the motorbike, the rider is the next most important factor to consider.
The rider is so important that the person you choose may make or mar the project. The rider has to be ready to work, conversant with Lagos cities, possess good phone manners (you'll have to train him), must be honest cause he'll handle cash, and also products.
You need at least 1 mobile phone for the rider to make contact with the buyers. If you're the one managing the outfit, you'll also need to be in constant touch with the rider in case the need arises. Other stationery can be acquired along the way. If you have more to invest, you can consider getting a space, computer, software and 1 or 2 more staff.
From my discussions on a logistics trainer/ consultant, it is possible to deliver an item anywhere in Lagos at the cost of N200. With the added benefit of delivering in volumes, this cost can be conveniently reduced as the cost would be spread out. If you have a smart and efficient rider, you can considerably reduce overhead expenses.
A typical Lagos delivery cost N500. The logistics outfit charges that much to deliver around the state. Some charge more to deliver at the extremes of Lagos eg. Ikorodu, Agege, Okoko, Alaba International. As a new entrant, you can maintain a flat rate of N500 for the time being.
Good places to get sellers who will use your service are Konga, Kaymu and Dealdey, where merchants are allowed to self fulfill. For instance, 2 of my stores sell an average 100 items monthly. The delivery outfit handling this just needs to get 9 more customers like this, and they're sure of about 1,000 deliveries monthly.
There's an arrangement with Dealdey, and the delivery company charges between N300 to N400 for 1kg delivered around Lagos. That translate to
1,000 (deliveries) X N300 (minimum delivery charge) = N300,000
monthly in revenue. Of course expenditures like fuel, oil, recharge cards, bike maintenance , rider's salary, miscellaneous will be deducted from revenue. If you're able to beat down cost efficiently, it's possible to go home with between N50,000 to N150,000 a month.
For your marketing, you have to devise creative ways to reach out to online merchants. You are only limited by your imagination.

Eye opening write up I must say. Can I please give you a call concerning this piece? My number is 08033344312

1 Like 1 Share

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by DealFinder(m): 9:03pm On Feb 29, 2016
Demmah:


Eye opening write up I must say. Can I please give you a call concerning this piece? My number is 08033344312

ok
Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by afroxyz: 8:03am On Mar 01, 2016
What about license? I understand that you need a license from NIPOST to start delivery business. Also what other papers do you need to have? What permits does your dispatch rider need to have to avoid harassment from the numerous uniformed officials in the city of Lagos

1 Like

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by INDESTRUCTABLEX(m): 10:58am On Mar 01, 2016
DealFinder:
Why did I put up this thread?

To get people more aware about this need that needs to be filled. And considering the fact that it doesn't take as much money as previously thought to set up.

Secondly, and very importantly, I'm in need of a logistics outfit that can handle my teeming orders, as it seems that the current one I use isn't as efficient as it used to be. Especially with our Ecommerce store set up with lots of orders to handle

All you have said is true. It will be nice helping you handle your business logistics. However, our service is a startup and we are limited to pickup and deliveries in only Rivers State at the moment. We should be entering Lagos in 6 months time.

Is there a number we could reach you on? Or kindly contact us on: 07035107792.

Waka4u
Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by Carmal90(m): 11:35am On Mar 01, 2016
DealFinder:
Why did I put up this thread?

To get people more aware about this need that needs to be filled. And considering the fact that it doesn't take as much money as previously thought to set up.

Secondly, and very importantly, I'm in need of a logistics outfit that can handle my teeming orders, as it seems that the current one I use isn't as efficient as it used to be. Especially with our Ecommerce store set up with lots of orders to handle

Yes, i can do that conveniently but no cash..any assisitance??

1 Like

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by scott1010: 11:45am On Mar 01, 2016
E-commerce delievery can be set up as describe above but not as easy as people are made to believe,I currently handle e-commerce delieveries for major e-commerce companies in lagos and I can tell you that a lot of other factors can hinder your output in achieving you planned project,this factors are stated below.
1.A lot of customers have bad attitude towards making you have effective and fast delieveries,for example,you get to a customer end to deliever and he tells you he has changed his mind on the product,that it looks different from what he saw on Internet.here you can not claim money for the delivery
2.A lot of people delay you unnecessarily when you go to deliever as such if you have a target of ten delivery a day you might end up with only four or five.
3.there are lot of people that fiddles with their phones to make orders they don't need as such they refuse picking their calls when you are ready to deliver.
I guess delieveries will be attractive once customers are made to pay for at least 5% of value of their shipments as people will not want to loose money and respond to their items in a positive way

24 Likes 1 Share

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by scott1010: 11:51am On Mar 01, 2016
If logistics is that easy Jumia will not pull out of pick ups,even at start up konga involves the service of DHL but they later back out as big as they are,e-commerce delievery is peculiar and sensitive than other forms of delieveries,

6 Likes

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by DealFinder(m): 6:00pm On Mar 01, 2016
scott1010:
If logistics is that easy Jumia will not pull out of pick ups,even at start up konga involves the service of DHL but they later back out as big as they are,e-commerce delievery is peculiar and sensitive than other forms of delieveries,

Very true. However, there's an aspect of logistics referred to as reverse logistics. This handles returns, cancelled, rejected orders etc and if not properly run it will eat deep into the finances of the company.

That's the major problem that most logistics and Ecommerce platforms face, including Jumia

2 Likes

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by scott1010: 6:16pm On Mar 01, 2016
I agree with you on your facts,but as a professional on the field I know this aspect of logistics is still very unripe in Nigeria considering the avoidable obstacles that still persist,it's different from the normal mail delievery and that is why one of the biggest logistics firm DHL pulled out of konga deal

1 Like

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by Nobody: 6:47pm On Mar 01, 2016
N300k cannot set up a logistics outfit in Nigeria with licensing fees that are over N2Million Naira for just intra state coverage

2 Likes

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by DealFinder(m): 6:31am On Mar 02, 2016
1stCitizen:
N300k cannot set up a logistics outfit in Nigeria with licensing fees that are over N2Million Naira for just intra state coverage

We're talking starting out with 1 delivery motorbike. Of course there are licenses that goes with establishing a courier/ haulage outfit, but we're looking at starting out with self fulfillment
Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by Nobody: 7:26pm On Mar 02, 2016
DealFinder:


We're talking starting out with 1 delivery motorbike. Of course there are licenses that goes with establishing a courier/ haulage outfit, but we're looking at starting out with self fulfillment

Running a delivery business with even a bicycle without proper Nipost license is illegal in Nigeria. A lot of people have been arrested in Lagos and their motorbikes impounded for running such business

4 Likes

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by DealFinder(m): 11:38pm On Mar 02, 2016
1stCitizen:


Running a delivery business with even a bicycle without proper Nipost license is illegal in Nigeria. A lot of people have been arrested in Lagos and their motorbikes impounded for running such business

Thanks for the info

1 Like

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by Palantir: 11:09am On Jun 18, 2016
Running a COURIER company without a NIPOST licence is illegal. Having a delivery service attached to your business doesn't need NIPOST. You get that when you register the motorcycles through Lagos State. At least for Lagos based businesses
1stCitizen:


Running a delivery business with even a bicycle without proper Nipost license is illegal in Nigeria. A lot of people have been arrested in Lagos and their motorbikes impounded for running such business

1 Like

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by Palantir: 11:12am On Jun 18, 2016
@Dealfinder Took your advice and have started a delivery service attached to my business. Thanks for the tip

1 Like

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by mailmalc(m): 1:37am On Jul 20, 2016
@Palantir

I am looking to start a delivery service, Kindly provide your phone digits for a brief discussion please.
Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by obiaguna(m): 12:04pm On Oct 01, 2016
1stCitizen:


Running a delivery business with even a bicycle without proper Nipost license is illegal in Nigeria. A lot of people have been arrested in Lagos and their motorbikes impounded for running such business

Can you expatiate on this? Can one partner with already existing logistics companies to avoid paying this huge NIPOST fee at least for the start up stages..
Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by afanide: 12:25pm On Oct 01, 2016
Nice One
Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by pclever1(m): 2:20pm On Jan 12, 2017
please how do i register my bike and the process involved in registration.My contact on whatsapp is
07037510366
Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by goldincome(m): 2:59pm On Jan 12, 2017
I have a business that needs a my own bike to run deliveries for our customers. What are the registration processes for Lagos and fees involved?

If you have info about this, please share it.
Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by pclever1(m): 3:29pm On Jan 31, 2017
All you need to start a delivery business for company is get an office space,buy a dispatch bike 200c as required by the LSG. WRITE A LETTER TO THE lagos state ministry of transportation to collect the OK( The OK PAPER IS GIVEN BY THE MINISTRY OF TRANSPORTATION) Its an inspection by the VIO. ONCE you get that paper,you can now proceed to register your bike with any of the vehicle registration center close to u.
Note- The process of getting this OK is very cumbersome as you would have to take the bike their for inspection.
Don't be deceived,to get the Lagos state spec,you need a minimum of 360,000 for the purchase and your advised to run a comprehensive insurance on the bike to avoid a lot.
For more Info- contact 08027366498

Secrets of Overcoming client droughts in operating dispatch services in Lagos.The market is their,lets walk you through the pathway.Join us every saturday(STAYING HEALTHY IN RUNNING A DISPATCH SERVICE).Book your spot now-whatsapp 07037510366

3 Likes 1 Share

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by ubergold(m): 11:13pm On Jan 31, 2017
DealFinder:
Why did I put up this thread?

To get people more aware about this need that needs to be filled. And considering the fact that it doesn't take as much money as previously thought to set up.

Secondly, and very importantly, I'm in need of a logistics outfit that can handle my teeming orders, as it seems that the current one I use isn't as efficient as it used to be. Especially with our Ecommerce store set up with lots of orders to handle

Great thread. I presently run a door-step delivery service outfit in Port Harcourt. We handle deliveries within Rivers States for now and occasionally to yenagoa in special cases. I hope to spread operations across the south-south States soon. It's not easy but as the day goes by, it gets very interesting

1 Like

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by ubergold(m): 11:24pm On Jan 31, 2017
scott1010:
E-commerce delievery can be set up as describe above but not as easy as people are made to believe,I currently handle e-commerce delieveries for major e-commerce companies in lagos and I can tell you that a lot of other factors can hinder your output in achieving you planned project,this factors are stated below.
1.A lot of customers have bad attitude towards making you have effective and fast delieveries,for example,you get to a customer end to deliever and he tells you he has changed his mind on the product,that it looks different from what he saw on Internet.here you can not claim money for the delivery
2.A lot of people delay you unnecessarily when you go to deliever as such if you have a target of ten delivery a day you might end up with only four or five.
3.there are lot of people that fiddles with their phones to make orders they don't need as such they refuse picking their calls when you are ready to deliver.
I guess delieveries will be attractive once customers are made to pay for at least 5% of value of their shipments as people will not want to loose money and respond to their items in a positive way

You are really in the business! Worse is someone telling you to deliver only to get there and refuse answering your call. I have had cases of traveling to as far as onne from pH only for the customer to switch off their phone. Sometimes I feel we are not ripe for online shopping yet. But the prospects however are promising no doubt.

3 Likes

Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by obiaguna(m): 1:55am On Feb 01, 2017
ubergold:


Great thread. I presently run a door-step delivery service outfit in Port Harcourt. We handle deliveries within Rivers States for now and occasionally to yenagoa in special cases. I hope to spread operations across the south-south States soon. It's not easy but as the day goes by, it gets very interesting

How much did it cost you in starting cos from my calculations it cost quite a lot. How is business down south?
Re: Starting Your Own Logistics/ Delivery Outfit With Less Than 300k by INDESTRUCTABLEX(m): 5:55am On Feb 01, 2017
ubergold:


You are really in the business! Worse is someone telling you to deliver only to get there and refuse answering your call. I have had cases of traveling to as far as onne from pH only for the customer to switch off their phone. Sometimes I feel we are not ripe for online shopping yet. But the prospects however are promising no doubt.

You also ran deliveries in Ph?

2 Likes

(1) (2) (3) (4) (Reply)

Nana Otedola 49th Birthday: Femi Otedola Celebrates His Wife (Photos) / "5k Is Not Small Money In This Buhari Weather"- Angry First Bank Customer / ECOWAS Adopts ECO As Name Of Single Currency

(Go Up)

Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health
religion celebs tv-movies music-radio literature webmasters programming techmarket

Links: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Nairaland - Copyright © 2005 - 2020 Oluwaseun Osewa. All rights reserved. See How To Advertise. 204
Disclaimer: Every Nairaland member is solely responsible for anything that he/she posts or uploads on Nairaland.