Draw areas around what you can serve
A delivery area is a promise: an order from inside it will arrive. Draw it from what you can actually do, how far your warehouse reaches in a working day and where your reps already drive, not from a list of districts you would like to sell to.
Follow boundaries a customer can recognise, such as main roads and district lines, so they can tell whether they are inside. Keep the first areas tight around the routes you already run, and widen them once deliveries there arrive on time.
- Mark the warehouses that will ship online orders
- Mark where your reps already drive each week
- Draw each area around a warehouse and its reps
- Name each area so the office knows it at a glance
- Leave out districts you cannot reach reliably
TipDraw the area a little smaller than you think you can serve, and widen it after a month of deliveries.
Give each area its warehouse, prices and reps
Each area needs three decisions. Which warehouse ships its orders, so the stock shown to the customer is stock that can reach them. Which price list it sells at, so an area with higher costs or different customers can carry different prices. And which reps cover it, so a new order goes to someone who will actually be there.
A customer with negotiated prices should keep them wherever they order from. The area’s list is for customers without one of their own.
- Warehouse: the one nearest the area, or the one with the stock
- Price list: the area’s default for customers without their own
- Reps: everyone whose route passes through the area
- Status: active while you deliver there, paused when you stop
TipList at least two reps for every area, so orders still move when one is off.
Work out what a delivery costs you
Before setting a fee, know what one drop costs. Add up a delivery day: the vehicle, fuel and the driver’s or rep’s time. Divide by the drops made on a normal day. Use a real week, not a planned one, because the planned one never includes the wait at the shop or the drive back.
Far areas cost more per drop, because more of the day goes on driving between stops. Work the figure out for each area, not once for the whole business.
TipWork the cost out again when fuel prices or wages change, not only once a year.
Set a fee for each area
Few distributors charge the full cost of a drop. The fee covers part of it and discourages very small orders; it is not there to make money. A simple pattern is a low fee or none for near areas, where drops are cheap and competitors are close, and a higher fixed fee for far ones.
Judge the fee against what the order earns. A drop pays for itself when the margin on the order plus the fee covers what the drop costs.
TipShow the fee in the cart before checkout, so it never appears as a surprise on the invoice.
Treat the fee as a line on the invoice
Charge delivery as its own line on the order and the invoice, sold as a non-stock item, so it is invoiced, taxed and reported like any other sale. A fee hidden inside item prices cannot change without repricing everything, and nobody can see what delivery earns.
Decide too what happens when an order goes out in two trips. Charging the fee once, on the first invoice, means a short delivery does not cost the customer twice.
TipUse one non-stock item for delivery in every area, so delivery income is easy to total.
Review the areas as orders come in
Once orders flow, look at them by area every month: how many, how large, and how many arrived on the day promised. Customers who ask for delivery just past a boundary are the clearest sign of where to grow next.
Pause an area rather than deleting it when you stop delivering there for a while, so its prices and reps are ready when you start again.
- Orders and average order value per area
- Deliveries made on the day promised
- Customers asking for delivery just outside an area
- Areas where one rep carries every order
TipWiden an area one district at a time, so you can see what each addition costs.
Checklist: Before you open an area
- Choose the warehouse that ships to it
- Draw the boundary along clear landmarks
- Give it a price list for customers without one
- List at least two reps who cover it
- Work out the cost per drop for the area
- Set the delivery fee, or decide it is free
- Sell the fee as its own non-stock item
- Test an order from an address just inside
- Review orders by area every month