How to set up an on-demand grocery market?
On-Demand grocery, while the internet is a great starting point, understanding ground reality carries a lot more weightage when you’re entering the on-demand sphere, leveraging on the booming on-demand economy. The on-demand economy is a subset of sharing economy or part of the so-called phenomenon—Uberization. And like any business, when starting a business, on-demand or traditional, you must meet a lot of people. It is better to learn from their experience, than your own. And of course, no business starts without proper research.
You must meet nearby grocery merchants, wholesalers, logisticians, transporters, technology analysts, etc. Many of them might become your business partners after your business goes running.
Find answers to all your question about the operations that enable an on-demand service. For example, grocery owners can tell you about the demand for grocery in your community.
A friendly logistician or transporter can give you a rough estimation of how much does it cost to run a fleet of delivery vehicles. Consulting is all about learning the expert’s point of view. A technology consultant, for example, will tell you the technology stack involved in building an on-demand service.
You must build repo with local people with influence: politicians, businesspersons, lawyers, public servants, bankers, and law enforcers. You can’t run a business if you disregard them. Also, they influence the community.
Attending a local church for sabbath prayer, being more frequent to community functions and services, organizing fundraiser, and throwing social gatherings definitely help build an acceptance within the community.
Once people in your community have started noticing and you have become a friendly figure, you’ll find relative ease in doing business with them.
3. Competitive Analysis
Remember, you’re not the only on-demand grocery store business serving the community. There would be tens of other, local and international, players fighting for space. Since they are into space for a long time now, there is a lot you can learn from them.
Of course, they are not gonna tell you their business secrets. But, you can do a SWOT analysis of your potential competitors. This will help you define your unique selling points (USPs) and find opportunities.
After meeting so many experts in the field, learning what your competitors are up to, building a repo in the community, and technology involved, you’ll get a rough idea of how much it’ll cost. This is going to be an upstream ride from here.
1. Grocery Stores
You need to partner with, depending upon the demand, at least 5-6 grocery stores in each locality you would be offering your services in. This means you have to cut a deal with them wherein they agree to pay a commission on every sale they made because of you. Deals may be harder to crack initially but as you gain a few partners, more merchants would be willing to join you.
While you buy grocery from any store, partner or not, at the standard rates and deliver it to the customer over a little delivery and, additional, convenience charges, I would still suggest bringing as many grocery merchants as possible overboard. Two-way revenues are preferable
While local grocery stores are the biggest source of supplies, wholesalers are apt for items most on demand for example sugar and basmati rice. Thus, keeping a bunch of friendly wholesalers helps and is thriving with the help of on-demand retail mobility solutions.
Grocery prices are subject to market fluctuation and as an online seller, you can earn a decent profit by storing them when prices are low and selling them when they arise.
For example, during winter, rice is costlier than in summer and if you store it in excess during summers and sell the surplus stock when the price will rise in winter, you can earn a lot, way more than grocers’ commission and delivery charges make you earn. Warehouses are easy to maintain with warehouse inventory management systems.
People restock their granaries once every year before the onset of winter. This is the time when the demand of essential cereals rises exponentially. There are two reason people restock in bulk: it is a one-time hassle and costs less. Retail merchants typically heavily discount their product when bought in bulk.
They may not provide the same rate to you, and at that time, it is better to provide the supply from a nearby farm at the base rate.
You need vehicles to ship product to the customers. Here, you have two options: either procure vehicles to build your own fleet or hire a delivery agency. I would suggest the later
You must hire drivers with commercial license. If you hired an agency, they will take care of vehicles, drivers and associated government regulation regarding delivery services.
You need a license from the concerned authority to run your logistics operations and operate a fleet of commercial delivery vehicles. Ask the help of a lawyer friend you made in the community.
1. Mobiles apps
As an on-demand grocery service, mobile apps for customers and drivers is a must. You can commission the app with the help of a technology analyst you consulted before to mobile app development company. I recommend apps for Android and iOS for users and Android app for drivers.
Customers to order grocery on the app. Drivers to fulfil their order and deliver it to the customers’ location.
Dashboard is the place for you to learn the status of the operation at a glance. How many live orders are there, how many vehicles are servicing the order, and how many are sitting idle, etc.
You need give support to your supply partners, drivers, and users if ever they end up in an issue with the app, payments, or delivery system. You take their complain and escalate it to the concerned departments and give them a rough resolution time. Including support option in the app itself is a great convenience to the customers.
I recommend a digital payment gateway like Stripe. PayPal integration is an added bonus. If you live in a country where cash payments still rule, add ‘Cash on Delivery’ option too.
In On-Demand grocery services, customers expect to track their order in real-time and thus tracking the vehicle that is bringing their order is something they expect. Make sure all your vehicles have onboard GPS device to make it a possibility with a fleet tracking system.
Both drivers and the customer must confirm a delivery. Not either of them to avoid conflict and unnecessary tickets to support desk.
On-Demand grocery Customers must provide feedback on their previous orders before ordering something new. I recommend a 1-5 star rating system with the option to give a review. Likewise, drivers can share their experience with the service too.