MaruMarket Grocery Delivery Service
In 2012 I had what I thought was a brilliant business idea. An online shop and home delivery service on behalf of independent grocery shops in my home-town of Beverley, East Yorkshire. I opened for business in January 2013 and delivered on behalf of the local greengrocer, butcher, fishmonger & bakery. A few other shops joined later. It started well and I got some great publicity. 18 months later though and I still wasn’t making enough money to earn a living. I was making steady progress so the decision to call it a day was a very difficult one. It may have progressed to be a successful business but with a young family I didn’t have enough resources/money/investment to keep going without any income. So in May 2014 I closed the van doors and did my last deliveries and changed the focus of the business to help independent shops improve their on-line presence.
“So why am I selling website services to local shops if my business didn’t work?” I hear you wonder.
Good Point! I’ll explain……
Some of my problems were:
- Selling groceries solely on-line is a niche business. Too niche to grow the business to the size I wanted to grow it to. And I didn’t have the investment Ocado have got. As an additional source of revenue for an existing business it is not to be sniffed at.
- I operated in a rural area which meant delivery times were long. I needed to be doing 3 deliveries per hour to break-even. I was obsessed with only delivering the evenings as that’s when the shops are closed. I also only delivered in 2-hour windows. Using longer windows is much more efficient. If you already deliver then you can tie any extra on-line orders in with your existing delivery rounds so you won’t have this problem.
- There was a slight conflict of interests with my suppliers. I wanted to sell to customers online, but they would rather take orders directly. If you operate within your own brand of shop then you don’t mind where you sell, as long as you sell.
- If I wasn’t happy with one of my suppliers then I had to change them. That’s normal with any business, but I was very restricted by physical location. I was collecting fresh produce daily from 8 different shops. If 1 shop was located a significant distance away then it didn’t make it worthwhile to work with them. Not a problem for you as you’re delivering your own produce.
- I didn’t fully benefit from my on-line marketing. I would spend time and money promoting my produce. I was also very open about where my produce came from. Many customers still preferred to shop in-store, even if they’d got an email or seen an update from marumarket which prompted them to shop. The on-line marketing side of my business worked very well – just not always for my benefit. You’ll benifit from on-line marketing whether it’s in-store or on-line.
- The margins were very tight. I was an extra layer in the cake from supplier to customer. This meant that to price match with my supplying shops I had to operate on very tight margins. Or I had to more expensive than them. That would have given customers less incentive to shop with me. I also had to charge for delivery to earn my moeny. If you’re operating with greater margins then you may be able to absorb the delivery costs.
All of that said, It’s not a totally crazy idea. There’s a company in London call hubbub who operate an identical business model to the one I was using. They seem to be making good progress. A chap in Leeds delivers on behalf of the market stalls at Leeds Markets. He’s called market delivered and seems to be doing a good job. I hope they do well because I think the service is a great idea and a refreshing change from the soulless supermarkets.
On the positive side, the average order size was significantly more than I expected it would be and my service was very valuable to my regular customers. I got some great PR (both in the local & national media) and made the finals of a national competition for start-up businesses.
So in conclusion, I think operating a home delivery service and on-line shop can, in the right circumstances, be very worthwhile within an existing business but not as a standalone business.
That said, an online shop isn’t the right choice for every business but at least make sure you have a website, facebook page and are doing email marketing. Those 3 things are very cost-effective. Whatever size your business is you’ll see a worthwhile return on these activities for sure.
Here’s a video I made when I was running the delivery service…..