Bike Delivery Service: Origin, Success, Failures and How to Start One

Back in the days, it was an uncle or a neighbor who was going to the market that acted as our delivery service. my mother would write a list and tell me to give it to uncle john or aunty Helen so that they would buy the items on their way back.

Sometimes we had to look for someone coming from another city and buy in bulk so that we don’t start searching for a makeshift delivery system the next week

The Gulder ultimate search for people to deliver goods for us did not always yield the required results. And traders, afraid that the lack of an effective delivery system would cost them their customers, came up with the idea of delivery boys and girls. Although they meant well, this delivery system did more harm than good,as these delivery boys and girls sometimes got locations wrong, delivered the wrong goods or delivered late and in some cases ran away with the goods

It was clear there was a serious gap between effective business delivery and customer satisfaction, something needed to be done especially among small-scale business owners. Necessity as they say is the mother of invention,we had bicycle men deliver letters, we had a delivery system for letters which the likes of UPS and DHL pioneered, then like simultaneous equation someone put two and two together

What is on the same scale as a bicycle but faster? A motorcycle. If motorcycles can be used to deliver letters can we not package them to deliver other goods? Then it clicked like Thomas Edison when he finally got the formula for the light bulb. Bike delivery system was the solution we had been looking for this brings us to the benefits

Brief History: Evolution of bike delivery system 

According to Florin Costache, bike couriers in the United States got their start in 1894, when a railway strike had mail deliveries stopped in San Francisco. On observing this, it down on a Fresno bike shop owner to set up a route from Fresno to San Francisco, a beautiful business idea that had remarkable success.

Soon enough big companies also started using bicycles to do deliveries, at first including Western Union and eventually even the US Postal Office.

UPS

The story of delivery service cannot be complete without the story of two teenagers way back 

August 28, 1907. An 18 year old Claude Ryan and a 19 year old Jim Casey.  The two had one bike and burrowed $100 (about $2400 today) from a friend to found the “American Messenger Company” in Seattle, Washington.  

In those days there was neither smartphones nor social media except telegrams with which sending message was a frequent thing.  These had to be hand delivered.  The company expanded from delivering these telegrams into transporting pretty much anything that could be transported on a bicycle or on foot. While Casey and Ryan received order via the phone, Casey’s brother George and a handful of other teenagers went out making deliveries.

A few years, Casey and Ryan  acquired a few motorcycles and delivery cars to run their business more efficiently. At this time, there were more people having telephones, so Casey and Ryan switched to working with retail stores to deliver customers' purchases to their homes. This gave birth to UPS, one of the first and oldest delivery services

By the time Casey retired from UPS in 1962, the company had grown to operate in 31 U.S. states with annual revenue of around $550 million and about 22,000 workers.

Casey and Ryan’s company that started with a bike and $100 some 100 plus years ago worth approximately $80 billion with annual revenue at over $50 billion in 2013; employing just under half a million workers in 200 countries; delivering over 3.8 billion packages and documents a year.

DHL

DHL is another prominent courier service after UPS. It started in 1969 and was founded by Adrian Dalsey, Larry Hillblom, and Robert Lynn in San Francisco. In 1971, DHL expanded its Express network rapidly and becomes a trusted partner of many companies. Expansion into the Far East and Pacific Rim. 

In 2003, Deutsche Post, DHL and Postbank make up the Group's current brand architecture. DHL now serves as the exclusive brand for all express and logistics activities. DHL changes its corporate colors from red and white to yellow and red. In April, the worldwide visual transformation of all vehicles, packing materials, and buildings begin. 

Today, DHL is active in more than 220 countries and territories. Within their worldwide network, DHL Express delivers on time at the right address with an understanding that their customers' shipment is far more than just a parcel.

Benefits of bike delivery system

1. Fast delivery: Everyone wants to be able to get the goods they buy as quick and possible and this made it possible for people to get their goods as if they were physically present in the store.
2. Convenience: Not everyone can make it down to purchase items and as much as possible we need this thing for our everyday life, it gives you a breath of fresh air when you can just pick up your phone, order for something and has it delivered to your doorstep
3. Business boost: If you want to expand your market, it is important you invest in an effective delivery system, so you can get both an online and offline customer base. 
4. Effective packaging: Packaging is important for your brand identity and of course if you want to make use of a delivery service you have to package your goods well and it helps attract more customers. 
5. Customer satisfaction: Nothing puts a smile on a customers face than to see goods delivered, fast and in good condition and no stress at all to the customer and bike delivery has made this possible in recent times

Now let us move to how bike delivery service started in Nigeria. It is said that if you want to go on a journey it is important that you learn from those who have gone down that path

We would be learning from one of the pioneers of bike delivery system in Nigeria - GOKADA I found their story quite fascinating I hope you do too.

How Bike Delivery Service Started In Nigeria

While there may not be a precise date for some of these services in Nigeria, there are quite a number of them in Nigeria. Prominent among them include UPS, DHL, Gokada, Jumia, Konga, and GIG Logistics. We are aware that the first three are foreign-owned. Today we have so many more logistics businesses in Nigeria, especially Lagos. You would agree with me that most of these businesses thrived a lot during the lockdown in 2020. 

Well, the good news is, they still thrive today, and while we may not be having another lockdown, the world has never been and will never remain the same again since the pandemic. If there is anything this means, it is that the logistics business will yet thrive, even more.

Let's take a look at some of the major logistics businesses in Nigeria.

GIG Logistics, a subsidiary of GIG Group, started in 2012 in Lagos with its founder, Chidi Ajaere who doubled as CEO of GIG Mobility, a distinct company with its own assets and separate operations. In 2014, GIGL incorporated technology to track all ground shipments electronically. In 2017, GIGL opened its office in Houston, Texas, and expanded to Ghana in 2019. 

In 2019, GIGL launched GIGGo, an on-demand delivery app that allows its customers to request pickup and delivery of items without visiting a service centre. 

Their services and products include courier services, mobile, social, and e-commerce logistics, delivery services, on-board courier services, imports, packaging, mailroom management, and relocation services

GOKADA started in 2018 after the founder surveyed and discovered not many services as such existed. Perhaps the only one around at the time was DHL. He did his market analysis and created his positioning, and then launched.  

Government Policies on Bike Delivery Services in Nigeria

Government Policies can work to your advantage. It can also work the other way round. In May, the Nigerian Postal Services (NIPOST) shared a letter showing the new Nigerian licensing regime. 

When the service providers could not cope with the new regulations imposed on Courier services in Lagos, they took to social media on the 25th of July 2020 with the hashtag #SayNoToNIPOSTFees, to protest the new fees, 

The new registration and licensing process the LSETF references in its website is handled by the Courier Regulatory Department (CRD), a specialized arm of NIPOST. Under the new licensing structure, there are six categories of licenses that range from ₦250,000 for SMEs like restaurants to ₦20,000,000 for international courier companies like DHL. 

Reports indicate that from July 23, policemen in Lagos began arresting hundreds of dispatch riders in Lagos, and seized their motorcycles for failing to have the NIPOST license.

This attracted the attention of many including the Minister of communication, Isa Pantemi who had to call for the immediate suspension of the fees while claiming that the new license fees were not part of the approved regulation. Initially, the Courier and Logistics Services Operations regulation (2020) was issued by the Ministry of communications and digital economy. The outcry of the people eventually prevailed.

But how lasting was this victory? A new obligation came up. According to Regulation 8(5) of the Courier Service Regulations, logistics companies are mandated to contribute a sum equal to 2% of its total revenue to the Postal fund, which will be used for postal development and delivery of postal services in rural and underserved states. Welcome to Nigeria. Lol.

As though that's not enough, Regulation 8(7) requires for referral of specific items to NIPOST for processing and delivery.

Here it is n details,

“items/articles such as rights issues, share certificates, statements of accounts, cheques, letters or offer documents weighing below 0.5kg sent to courier service operators for delivery must be recorded and referred by such operators to the nearest post office of NIPOST for processing and delivery.”

“Any operator that fails to comply with this requirement will be liable to pay a penalty of 90% of the amount charged on the item by such an operator.”

This section raises a lot of concerns in people's minds.

So what do you do?

How To Start A Bike Delivery Service In Nigeria

Like every other business, Bike Delivery Service is WAR. Yes. It's war. The reason is simple, you have too many competitors trying to have a market share, coupled with some government policies that might not be so favorable. This especially if you are in Lagos Nigeria. So, like every war, the first step is strategy. Ready? Let's do some strategy for your bike delivery business.

1. Study the market: 

There are questions to ask, though they are not new anymore. Yet, they must be asked. Questions such as

• What is the market share like?
• Who are the major TA?
• What is their buyer persona like?
• What are their fears and concerns?
• Why do they prefer xyz logistics to others?

Now, if you are not a strategist or a consultant, you might want to outsource this to someone who is good at analyzing these questions and finding the perfect answers for them. You can just click on this link to Chat on WhatsApp with me. Or you can call me right away on +2347080225737.

2. Ask Yourself The Right Question

In Nigeria, if you don't have a strong conviction and a resilient spirit, you will likely end up among the 95% whose businesses die within the first 5 years of starting. When you get to the part of government policy you will understand better. 

The what that answers the why should be the NEED you MUST identify first. And the rate of demand for it. According to Saleh, the late director of GOKADA, he identified Nigeria as the target market, visited the country, picked Lagos state after identifying the need based on their huge population, and lack of an effective transport system

In the meantime, you want to ask yourself, am I doing this for the money alone? Or for posterity? How big do I want this to become? when do I want to start? And where?

3. Write a Business Plan 

There are many questions people ask regarding business plan. Some of them include. why do I need a business plan? People who have business plan end up not seeing the light of the day, so what's the essence? Busness plan in most cases is like a new year resolution. Why should I still write it? 

Well, ever planned on travelling or going somewhere, and you just stood up and began to make your way there without wearing the right cloth for the dress, taking your phone and probably a bag, or even knowing where you are going, the best road to take to get there?

If you care to know, most businesses thrive because there is a plan, whether it was preplanned or it was planned along the way. But some businesses still fail even after the business plan simply because they put it in the shelf and let cobwebs and dust find dwelling place on it, rather than open it and follow it to the last.

So in a bid to explain why you need a business plan, I came to a conclusion that people who start a business without a good and well detailed business plan end up with the 95% whose businesses die before they are born. You might want to click here to have a 360 understanding of business plan.

See: All You Need To Know About Business Plan in Nigeria 

4. Register Your Business

Registering your business gives you credibility in the mind of your customers. It also saves you from trouble. This is aside from the fact that it is the right and professional thing to do. And if you know the right way to go about it, you won't have to spend much. 

5. Create a Website

I understand this has become a cliche, but let's look at it from this angle. Would you comfortably send a package worth 50k to a certain destination using a bike delivery company you can't trust or some random courier service that calls itself a brand simply because they have an Instagram account with 192 followers?

Research has shown that most of us tend to trust companies with websites more than those without. So you want to do the same for yours

6. Develop an App

Yeah, I get that it sounds far-fetched because of the cost and everything. Well, you might not want to go for it at the beginning stage, probably because you don't have the capital that covers that. But, hey, it plays a huge role in your business, especially if you are looking at the aforementioned brands as your competition.

For one, transactions and orders using mobile apps are much safer, easier, and faster. Also, it makes your company appear more professional and more reliable than those with websites alone.

Using your app, create a booking system that allows for people to book ahead of delivery will make communication and delivery easier and faster. Maps designed based on each customers location to make locations easier. Slot allocation so as not to stress bikers it is important to put a peg on the number of deliveries we can make in a day

Drop off location points for areas with bad road networks and which are very inaccessible nearest street or junction would be used as drop of location 

7. Brand Your Business

This is that part we answer the question, "How do we position ourselves uniquely in the market?" Remember when I talked about Gokada? Well, the first thing that attracted me to them was the branding. They invested in quality branding. Now you must have heard the saying, do not judge a book by the cover. Well, while most times the cover doesn’t tell the story of the book, it can attract readers to explore the book. The same applies to branding. 

Beyond logo, branding gives you a signature in the market that can be seen, felt, experienced, almost touched. Take a look at MTN, GTBANK, APPLE, SAMSUNG, COCACOLA, ETC. You will agree with me that these guys have so distinct themselves over the years in their markets that you can't help but notice them and tie a certain experience to them. 

Are you ready to do that for your brand?

8. Build a Team

No man is an island and it is said teamwork makes the dream work; to build an effective delivery system it is important to assemble a team that understands the business. the grassroots. You want to have a group of people divided into the following teams:

• Customer Care/Service
• Logistics
• Strategy
• Marketing

Taking a cue from GOKADA again they assembled a team indigenous to Lagos, a team that understands how Lagos works and could think along the lines of the problems and how the business can constantly come up with solutions. 

Bike Delivery business is an on-the-go business, so it is important you have a strong recruitment policy that helps you bring on board the doers and the thinkers. Bike delivery service deals with problem-solving, therefore it is important that you always evaluate and come up with ideas to make the system better. 

You want to ensure the logistics team is up and running, and everyone is always on the alert. You also want to ensure the customer care team is offering the best customer service to your customers. And definitely, you want to ensure your marketing team is actively managing and maximizing the digital space, creating engaging content, answering people's questions via DM and comment section, etc.

All these are necessary because as much as the bike delivery system has added so much value there has been a lot of failures too. Again, invest in your team ,build an effective structure and watch team work make the dream work

Learn how to appreciate your team as well. A motivated employee will be more productive than one who doesn't get appreciated.

9. Invest in Marketing

When consulting for startups and SMEs, one of the things I have always hammered on is, there are two sides to every business, the technical aspect, and the marketing. It is not enough to have a good idea with a good concept on how to run it. 

It is not enough to have the best and the right content or value. If your marketing is not strong enough, competitors you are by far better than will sweep you off the market.

And that also means you must study your competition well. There is only so much you can learn from them. It doesn't make you any inferior. If you understand business, you would know it rather keeps you on your toes and in check.

11. Review and Upgrade

They say feedback is the breakfast of champions, yeah? Taking your time to study feedback on your company via social media, questionnaires, honest opinions from friends and staff, etc, would go a looooooooooong way to showing you where you are, how forward or backward you are, and how you can improve to be better.

Your review can also come from studying the industry and not just your brand. For instance, the world is moving, equipment is being upgraded daily. Services and others are being improved. The death of successful businesses is usually when you rely on past success that you fail to learn the latest trend and improve with it.

Learn about the new equipment in use, the new apps, the new channels your target audience visit the most. Leverage on the answers you get. 

Conduct a survey by asking people what they like or dislike about bike delivery system ,what improvements would they like to see, etc. Have online feedback sessions. You might want to consider attaching incentives to it so as to have feedback that would help you create a more effective system

Take your competitor analysis very seriously

Bonus

If you feel you don't have all it takes to do all these or you are perhaps not good at doing some of the aforementioned, it is nothing to worry about. I can help you with almost everything here. Just click on this link to chat me up on WhatsApp or call me directly on +2347080225737. You can also send me an email at manicleworld@gmail.com 

Read Also: 17 Things To Consider Before Starting A Business 

Conclusion

Bike delivery system no doubt has its flaws , but it has proven to be a more effective system than waiting for Iya Risi to buy goods for you from the market and deliver it to you ,or uncle Nnamdi to buy goods from aba, what if uncle Nnamdi decides not to come again and iya Risi decides to visit iya aisha and forgets about your goods. 

These tips would surely get you to a good start and it is important you keep them in mind while also striving to continually make your business better. And having evaluated the bike delivery system, you would agree it has largely been effective and if you hope to join the bike delivery system I do hope you find the tips in this article helpful. 

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Written by Blessing Alasa

REFERENCES

https://techcabal.com/2020/05/18/gokada-finds-new-growth-in-logistics-thanks-to-a-previous-success-story-in-bangladesh

https://chichagomessenger.com/7-benefits-of-hiring-a-bike-delivery-messenger-for-a–quick-shipment/

https://techpointafrica/2020/08/20-ecommerce-logistics-nigeria/

http://www.todayifoundout.com/index.php/2010/06/ups-was-founded-by-two-teenagers-with-one-bicycle-and-100-borrowed-from-a-friend/ 

https://www.streetdirectory.com/travel_guide/41849/education/a_short_history_of_bike_messengers_and_their_fixies.html

https://www.dhlexpress.be/en/our-story/