How to Build a Quick Commerce Business From Scratch?
Building a quick-commerce business starts with understanding local demand, choosing the right fulfilment model, stocking essential products, and ensuring reliable deliveries. Prove the business model in one area before scaling new markets.
Convenience and speed are the key elements of quick commerce. But it's essential that quick commerce shops are normally stocked much closer to their clients as compared to conventional e-commerce, which may well involve orders being delivered from a central warehouse. They might be kept in a dark store, micro fulfilment center, or in the retailer's current store.
Quick commerce runs at speed and convenience, but fast delivery alone is not enough. But to process orders efficiently, inventory management, technology, picking and packing, and the last mile of delivery are essential.
How Do You Validate Local Demand?
Don't invest in fulfilment centers, delivery capacity, or technology without first making sure that there's a sufficient population in the area that will use the service. But most important of all, determine if your customers are paying for this minute delivery.
Start by researching:
- Customer locations
- Buying habits
- Product demand
- Local competition
- Willingness to pay
Consider the location of your potential customers, the items they regularly purchase, how frequently they do so, and local delivery options. You can also research the existing competition to determine whether or not the customers in the area are accustomed to rapid delivery.
Which Quick Commerce Business Model Should You Choose?
Your operating model decides where stock is held, how orders are picked and how they reach customers.
There are three common options:
- Standalone dark stores: These facilities serve online orders rather than walk-in customers. Their layouts can be designed around product storage, picking, packing, and dispatch.
- Existing retail stores: By allowing your stores to fulfill online orders you will not have to open up new fulfilment facilities. You just want to make sure your online orders do not interfere with your normal store operations.
- A hybrid model: You could mix existing stores and have some dedicated dark stores as well as demand grows.
It all depends on your service area you plan to offer your service in. What your selling and infrastructure. How many orders you will receive per area and your delivery time.
How Should You Choose Your Initial Product Range?
Large catalogs aren't necessarily a quick commerce business's strength. Too many low-velocity products can effectively tie up cash and fill warehouse space. The initial products should be those that have been defined in terms of local demand.
Utilize sales data to help find what your area is buying. This may differ by neighborhood as well. Company data can give you a good idea of what to have at your sites but make sure to have what your area is selling.
How Do You Build a Fulfillment Network Near Customers?
The first step to ensure fast delivery of your stock is to know where to store it.
Even the best delivery operation can’t keep windows short if stock sits too far from customers.
That’s why it is important to have fulfillment locations near areas where there are always high orders.
Set a fixed delivery radius for each site.
There should be a system of stocking that reduces picking time for all products available at the premises.
Packing and dispatch areas should also be well suited for quickly moving finished orders to the distribution partners.
Test the model in one small area before expanding to more locations.
All these will give you a better idea of the number of orders you can expect to get, picking time, delivery time, and customer demand before you become a part of a larger network.
What Technology Does a Quick Commerce Business Need?
The customer-facing website or app is just one aspect of a quick commerce business. Your ordering system should be linked to inventory:
- Order management
- Fulfillment
- Payment processing
- Dispatching orders
- Communicating with customers
Without proper integration, even minor data errors cause lost orders, delays and poor customer experiences
For example, if an item is not in stock at the customer’s nearest fulfilment center, it shouldn’t show as available.
How Should You Manage Inventory at Each Location?
Quick commerce inventory management should be done based on your real inventory in each fulfillment center. Having an idea of the total amount of stock in the whole business is not sufficient.
The real question is whether each site can fulfil its own customers’ orders.
- Monitor product sales
- Product stockouts
- Frequency of product stock moves
- Unsold inventory
- Product expiration
This data will be gathered over time and will give the totals of each of these products required at each location and when to restock.
How Can You Make Last-Mile Delivery Reliable?
Last-mile logistics is central to quick commerce. It’s the final leg from your site to the customer’s door. You can run your own riders, use a third-party courier, or combine both.
No matter which model is employed, understanding of the factor that affect delivery time:
- Traffic
- Delivery distance
- Preparation of orders
- Peak demand
Delivery time should be as per the operation's ability. Customers can be attracted by the promise of fast delivery, but when that is not met, the customer can be frustrated. Rather than being overly optimistic with a promise you often can't make, a realistic delivery promise is preferable.
Why Should You Launch Small Before You Scale?
It's not necessary to have an extensive dark store network from the beginning. You can test the quick commerce model on a small scale before committing a larger investment.
Select an area you want to offer service too. A product that you want to sell and what you can offer your customer. You will want to track how many orders you receive what times of day they come in. How often they order and delivery costs. You will save time money and effort on stock, employees, delivery and fulfillment.
Lastly remember Quick Commerce isn't just about speed. Its a balance between how much product you can demand have stocked. Your ability to fulfill those orders and get them delivered quick. Once you can prove this in a small area you can grow.
Planning your quick commerce platform? Talk to our ecommerce team.