Outsourced vs. In-house Delivery?

Unpredictable Outcomes

When venture-backed delivery companies finally raise prices (which is inevitable), they frequently go bankrupt or become too costly for their retailers to continue working with them given the misaligned incentives. Despite raising over $80 million, Deliv — like most outsourced delivery offerings — was unable to become profitable, ultimately shutting down in April 2020.

Tangible Costs

In addition to the above intangible costs, a retailer outsourcing their delivery must pay money for the service. These costs can include a 20% to 30% commission, as well as a basket fee per delivery, sometimes with a cost-per-mileage tacked on. Worse, they come with a catch: Often the customer will pay a markup on your product too — up to 91%! — which could discourage them from buying your product at all.

The Costs of In-House Delivery

Even as recently as a few years ago, infrastructure for starting in-house delivery took months to set up. Now, software platforms like Dropp can help you understand your real costs and be up-and-running in under a day.

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