Delivery Methods Save Big Bucks
| Bicycles offer a
healthy, hassle-free alternative for entrepreneurs to deliver their
Enrepreneur.com, October 8, 2008
When Daniel Corno opened his Pita Pit franchise five years ago in the
heart of Washington, DC, he knew deliveries would provide an important
revenue stream. The only question was: How to get hot food to
customers' doors in a dense, urban neighborhood with snarled traffic
and few parking spaces?
Pinched by both logistics and expenses, Corno shifted gears, settling
on the lowly bicycle as the best way to pedal his pitas. His riders are
a common sight on the streets and sidewalks of the Foggy Bottom
neighborhood, and teaming up with DCSnacks, another bicycle-based
delivery service, helped boost his sales by $2,000 a week.
Besides more timely deliveries and fewer parking tickets, Corno found
there were definite economic advantages to the low-tech distribution
method. First, salary expenses went down because he didn't have to
build the cost of gas into his drivers' wages. Secondly, with no
motorized vehicles to worry about, his liability insurance plummeted.
And finally, much to Corno's surprise, turnover decreased.
"A lot of drivers think the money looks good until they get their gas
bill, do the math, and decide they're not making enough," he explains.
With gas prices hovering around $4 a gallon, Corno is glad he made the
decision to park the delivery van, and it seems other entrepreneurs are
jumping on the two-wheeled bandwagon, as well. Courier services from
coast to coast are adding newfangled bikes to their fleets and touting
the cost savings of going gas-free.
At San Francisco's Cricket Courier, businesses with a two-hour delivery
window can line up a bike courier in the downtown core for as little as
$8, compared to $26 for a car or van. For small businesses with big
bills, savings like that can be a life-saver, so it's no wonder bicycle
delivery companies are picking up speed faster than Lance Armstrong on
a downhill straightaway.
Equipped with flatbeds, baskets or cargo lockers, the new generation of
delivery bikes can haul just about anything. At New Amsterdam Project
(NAP), a "human-powered delivery service" in Boston, trikes outfitted
with bright red cargo bins can deliver up to 800 pounds of goods in all
kinds of weather.
That kind of flexibility, along with rising gas prices, has helped push
the 1-year-old company to $100,000 in sales, according to general
manager Wenzday Jane.
"I think people are definitely coming to us as gas prices rise," Jane
says, noting that business grew significantly over the summer. She
counts a gourmet pasta shop, a dry cleaner and a boutique
chocolate-maker among her growing list of clients.
"We operate within a network of community-minded small businesses in
Boston and Cambridge," she says. "Many of our clients use
people-powered delivery as a marketing tool that helps set them apart.
It reinforces that these are local companies and locally made products."
"People tell me all the time how impressed they are with the tricycle
deliveries," says Renee McLeod, owner of Massachusetts-based Petsi Pies
and NAP's first client. "They always talk about how cool it is. It's a
great image for my company."
With two pie shops in the Boston area and $600,000 in sales, McLeod
turned to NAP last Thanksgiving to take over the deliveries she was
doing in her own car. Now NAP drivers show up every morning at 6 to
pick up the day's deliveries, allowing her more time to tend to the
"I wanted to be here making pies, but I didn't want to pay an employee
wages and benefits just to go drive around in my car," she says. "Plus,
I save on insurance. I used to insure anybody who drove my vehicle, and
that was expensive even without the cost of gas."
For entrepreneurs looking to cut costs, bicycle delivery might be the
answer. For do-it-yourself types, several companies offer bikes
equipped with a wide range of cargo containers, and customizing is
available to turn the bike into a rolling billboard. For those who
would rather let someone else do the pedaling, many delivery services
offer a bicycle option, even if they don't promote it heavily.
Either way, the cost savings can be significant and the branding
powerful. And then there are the purely psychic rewards. "I love that I
don't have to smell gas in the morning," McLeod says. "It just feels
like I'm doing the right thing."