3 business owners talk about their experience with delivery apps 


This week's edition of Everyday People features something a little bit different. Over the course of the past two months, we've had conversations with a DJ who teaches kids how to code, a lawyer who is also a content creator, a seller of electronic goods at Computer Village in Ikeja, an Uber driver, a dentist turned YouTuber, and Burna Boy's monitor engineer. All of these individuals are involved in more than one creative field.

This time, we will be speaking with three different business owners about their experiences with delivery and logistics in the crowded city of Lagos and the historic town of Kaduna.

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To start things off, let's hear from Egemba Michael Kachi, who works as a chef, photographer, and perfume merchant.

Kachi, Perfume Merchant

Do you use any apps for delivery?

I rarely use any of the delivery apps available. I can't remember which platform it was because someone else showed it to me first. After making the reservation, I was asked to pay, and I did so at that time. I was told that the person making the delivery would be here in about two hours' time. During the course of the day, I did not encounter anyone, I was not responsible for making the delivery, and I had already paid.

After that, I had a conversation with them, and they assured me that the issue would not arise again in the future, and I believed them. The following day brought about the same results.

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They did the delivery in the end, but that was it for me; I went back to my individual rider companies after that.

How do you feel about the traditional delivery companies that are out there?

When dealing with delivery companies, all you can do is mentally prepare yourself for the fact that you have no control over anything. They could pick it up from you and tell you that they are going there immediately, but then it could be five or six hours later, when it is getting late in the evening, that you realize that they have not yet delivered the item.

They will tell you things like, "Oh, the bike is broken."

Or, they were involved in an accident, or they were robbed by thugs working for the local government, etc. etc. etc. Whenever I am making deliveries, I always tell my customers that "You could get it today or tomorrow." This is because either day is possible.

I'm not trying to find a way out of this, but just in case something does take place... The thing that's the most frustrating is that even when they're going to be late, they won't call to let you know. If you call them, they might not pick up the phone, or if they do, they might be very impolite.

I once made the mistake of giving a package to the wrong rider; I remember being so perplexed about it that day, thinking things like, "Who did I give my perfume to?" However, that wasn't where the story ended. My perfume was delivered to their office by the rider, but I never saw it again after that. Before it was found, the manager had to threaten to withhold the employees' salaries in order for them to look into it.

On another occasion, the rider delivered the fragrance at eleven o'clock at night. At night! To give him credit, the manager had already informed me that it would be same-day delivery; however, I was unaware that his today meant from the beginning of the day until the end of the day.

Then, how do you interact with your customers?

I make consistent alterations to them. Therefore, this boosts their self-assurance to some degree. It would be very strange if I told them a rider had picked up and then they didn't hear anything from the rider or from me all day, and they didn't see any of their deliveries; it would give the impression that I'm trying to deceive them. Because of this, I maintain constant communication with the riders and provide feedback to the customers.

The next person on our list is Feranmi Ajetomobi, who works as a growth marketer for Flutterwave and is also one of the co-founders of the Nigerian food startup NiFries.

The original co-founder of NiFries, Feranmi

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How do you run your deliveries?

In reality, we engage in mixing. So in order to manage the deliveries, we have apps, as well as our delivery guys, who are people with whom we have developed relationships. This is very significant because if you start a food delivery service in Lagos and depend solely on apps to bring in business, you will almost certainly be dissatisfied unless the orders come from the apps themselves. If they do, however, bring in business, you will be successful.

The majority of the time, you will be required to actually hire traditional riders who are always available. It is a problem with supply and demand because, for example, if I had finished cooking by eleven in the morning and somebody placed an order at that time, I would have to go into the app, place an order for a rider, and then wait for the rider to arrive.

There are times when certain riders do not arrive on time, and there are also times when you would not even get the rider. Therefore, there is a significant problem with supply in relation to the delivery apps.

We have, in fact, resorted to having bicycles make deliveries on our behalf in the areas that are immediately surrounding us.

There is also the matter of pricing. If someone places an order for food by 11:00 a.m. and you tell them it will be delivered to them in 45 minutes, but you receive another order before you finish packaging the first one by 11:45 a.m., then one rider will be able to take everything.

However, in the case of the applications, I have to wait until the orders have been compiled before I can put in a request.

But…
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The profit margins in the food business are extremely low, which is the primary reason why I believe logistics companies that specialize in other types of logistics have no place in the food business. Nobody wants to shell out 1,000 (or $2) for something that can be purchased for 800 (or $1.8). However, if I were to buy shoes, I would pay 1,500 (about $3), despite the fact that a pair of shoes could cost as much as 10,000 (about $23) or even 30,000 (about $70).

Due to the margin cost, you either have to give that delivery company a large number of those orders or they have to charge you a high price because you've only made one order.

The alternative that has been successful in my experience is working with companies such as Chowdeck, which is a logistics company for businesses related to food. Their strategy consists of operating a marketplace where food business owners such as myself can list our companies and receive orders through them. The situation is exactly the same with Bolt Food.

In this way, I am not required to worry about the cost or the logistics of the transaction. The positive aspect is that in addition to operating that marketplace, you can strike a deal with Chowdeck that enables you to sell bicycles and other cycling-related merchandise within your retail location.

Orders can be obtained or processed even outside of their marketplace if the seller so chooses. To tell you the truth, the hybrid structure is superior to the others because it enables you to combine the market structure with your bicycle.

You operate in a more professional manner, and it is simple for you to keep track of your goods. Your product is protected, and you are held accountable for your actions. And some of them will even insure your products, protecting you to some degree in the event that they are lost or damaged.

Would you consider working in the logistics side of the business at some point?
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Owning a bike makes absolutely no sense from a financial perspective. In the future, I will be able to get together with other people who own food businesses and form a consortium of bikes. My partners and I will pool our resources and acquire ownership of our delivery network.

After that, I will have the assurance to purchase bicycles. However, for me personally, owning banks by myself is not at all a prudent decision for my business. It's way out of my price range. Expenses for upkeep and capital, in addition to operational expenses.

What is the one thing about delivery apps that you wish they were better at?

Tracking. The vast majority of them are terrible at it, which means you won't be able to accurately track the rider with your food.

Yetunde Aisha, the proprietor of Shop Yetu, a business that deals in secondhand goods and essential oils, is the person who comes in last.

Yetunde, Entrepreneur

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So how do you do your deliveries?

I make deliveries both inside and outside of the city of Kaduna. When I first started making deliveries within Kaduna, I was using all of these standard bike logistics companies.

But at the end of the year before last, there was a ban on all motorcycles, which meant that those logistics companies were unable to function. To do the same things that the bikes were doing, you needed a car or a keke (a type of tricycle). As a result, shipments within Kaduna were halted for a period of time because I needed to investigate various other options for delivering my goods.

And the challenge with operating an online business is that in addition to the cost of the item itself, some customers are put off when they learn how much it will cost them to have it shipped to them. The cost of delivery within Kaduna used to be 500 naira, which is equivalent to one dollar. However, those who used cars charged either 1,000 or 1,500 naira. Therefore, you can either raise the price that customers pay for delivery or take money away from the profit that your company is making. After that, I was assigned a Keke guy.

For deliveries made outside of Kaduna to certain locations such as Abuja, I prefer to use public transport because the cost of a car is 1,500 naira. But those are the ones that present a challenge because you can't keep tabs on them. You are required to keep calling the driver, and there are occasions when they hang up on their calls. Or you can bring it to the parking lot and have them put it in another vehicle for you.

I remember sending something to Jos the year before, but for some reason it was delivered to Sokoto instead; I have no idea why. Then, some of the vehicles don't show up until the wee hours of the morning because of concerns regarding kidnapping. Therefore, I needed to find somebody at the holding park in Mabushi (Abuja).

I only use GIG Logistics for deliveries to locations outside of Abuja because the packages can be tracked and, up to this point, my needs have been met. Since I began using GIG a year ago, the only problem I've encountered is when they confused the order in which my packages were delivered.

Have you looked into any other businesses?

I attempted to use DHL, but due to their high prices, it did not end up being a viable option. A good illustration of this is in Maiduguri, where I make use of the standard public transportation system to send packages. I used DHL three times when their rates were still affordable; however, as a result of the shortage of fuel and the increase in price of fuel, their rates have become more expensive. When I asked about the cost of sending a package, I believe they told me it would be 8,000 yen, which is equivalent to $18.

How much did the person pay for the cloth that they bought? When you take public transportation, you pay something like 2,000, which is equivalent to $4, and it gets you there.