How to Build a Delivery App [Ultimate Guide in 2020]

The lion’s share of Amazon’s growth can be explained by its well-established delivery business. Their web and app courier services added to this expansion.

A relatively small investment in a delivery app can have a tremendous pay-off: improved services, streamlined procedures, and a boost in income.

If you are one of these smaller companies, with this article, you can get the essential tips and tricks to build a delivery app.

How do Delivery Apps like DoorDash & goPuff Work?

How Do On-demand Delivery Apps Work?

By the way, most people think of on-demand apps only in terms of food delivery.

The range of on-demand delivery services can be broad and include services like clothing, shopping, drugs, etc.

On-Demand Economy Industry Characteristics

On-demand delivery apps can be divided into several groups:

Business-to-Consumer (B2C, also called Enterprise-to-Person, or E2P)

Examples include companies like McDelivery and Starbucks.

Business-to-Business (B2B, also Enterprise-to-Enterprise, or E2E)

An example is the shipment app Cargomatic, also called “Uber for truckers,” that allows enterprises to find reliable carriers.

Consumer-to-Consumer (C2C, also Person-to-Person, or P2P)

C2C apps like Etsy and eBay allow users to buy products and services from each other.

As well, keep in mind the variety of business domains to which the app could be applied:

  • On-demand car rental apps like Turo and easyCar.
  • Home services like Handy and Task Rabbit.
  • Transportation and logistics apps like Uber Freight and UberDeliver.

Unique Selling Points of Well-Known On-Demand Delivery Services

Next, we’ll brief you on how we managed to succeed with delivery app development with a real-life example. goPuff is a project that has grown into a complex consumer technology platform.

GoPuff On-Demand Delivery Service

In 2014, we started an on-demand courier delivery app development project for a local hookah delivery start-up, goPuff. As of 2020, it delivers everyday essentials like home cleaning products, personal care items, baby and pet products, OTC medications, food, drinks & more. The platform has over 200 facilities and operates in 500+ cities in the USA.

These days, goPuff app has over 2M downloads from app stores. We continue to provide ongoing development and support services for the project.

How to Start with App Development Wisely

Steps to Build an App for On-Demand Delivery

Step 1- Start with market analysis

  1. Market size

Market size depends on the type of on-demand business. In general, as of June 2020, on-demand delivery services are growing worldwide.

2. Target audience

Focus on the type of customer you want to attract.

3. Market demand

Why do customers order deliveries?

The factors driving this demand may be cost, speed, size, time-savings, group orders, etc. Learn if your customers prefer costlier 1-day shipments or cheaper options that take longer.

4. Competition

It is recommended that you benchmark your competitors against each of the market demands to have a comprehensive and clear view of their strengths and weaknesses.

5. Blockers and risks

Some of the most common blockers include investment, access to resources (e.g. partnership with grocery stores, the pool of drivers), distribution channels, and location (delivery to distant spots will take more risks).

As you complete your market research, use the findings to build a SWOT analysis.

Step 2- Choose a business model and monetization strategy

As you see, there are different ways to monetize in the on-demand industry, namely:

  • subscription plans
  • service fees (% from the order cost covers the delivery expenses)
  • advertisement (via banner, video, native ad, interstitial ad, incentivized ad)
  • eCommerce and merchandising

Step 3- Find a reliable software development company

Here you have the best of two worlds: low risk of failure and low cost.

Quality: Eastern Europe combines the unique conditions of well-established technical universities and a quickly growing online sector.

Price: Due to certain economic policies, rates are lower compared to other regions. This is due in part to a taxation subvention that is directed to boost IT growth.

Regions to Outsource On-Demand Delivery App Development

Your collaboration with a software development team will run through several stages. For instance, at MLSDev the app development process is split into two core stages — Discovery and Development.

Example of a Workflow Scheme of Developing an On-Demand App

Step 4- Plan and prioritize the on-delivery app functionality

Step 5- Test and launch the product

Step 6- Plan the ongoing app support and development

On-Demand Delivery Service Scheme

Step 7- Work on the offline side of the project

Functionality of On-Demand Courier Delivery App Development

Functionality for On-Demand Delivery Apps

Delivery App: Features for Client App

With the consequent project versions, you may consider including more advanced ones:

Functionality for a Courier App

An advanced courier app could include the following functionality:

Admin Features for App Development

Tech Stack for On-Demand Delivery Apps

1. Client-side (or, front-end of a service) — composed of the elements with which the end-user interacts.

2. Server-side (or back-end of a service) — corresponds to the place where all the app functions are performed. The common technologies applied in back-end development include:

  • programming languages: Ruby (recommended), Elixir, Python, PHP, Java, etc.
  • web frameworks: Ruby On Rails (recommended), Phoenix
  • database servers: PostgreSQL (preferred), MySQL
  • web servers: nginx (preferred), Apache
  • cloud server platforms: Amazon Web Services (AWS, EC2, S3, etc.)

3. API (Application Programming Interface) — protocol description of how system back-end and front-end interact. API also relates to the integration of third-party services used in the service.

Here is a high-level overview of the on-demand delivery project architecture.

High-Level Architecture for On-Demand Delivery App Development

KPIs in Building an On-Demand Delivery Apps

1. Grow the user base

  • Start with the local market
  • Pre-launch advertising
  • Involve local retailers

2. Increase user retention

  • Customer support
  • Rating and reviews
  • Loyalty programs
  • Partner screening

3. Keep contractors, drivers satisfied

4. Track digital service metrics

How Much Does it Cost to Start a Delivery Business?

Please note that these costs are based on an average hourly rate of $40 for software development services in Ukraine.

All in all, the on-demand economy industry has a lot of potential for investment.

As of 2020, the influence of COVID-19, as well as insight from statistics supports the fact that users demand the quick provision of services and delivery of goods.

Statistics of the On-Demand Economy Market

Note: This is a summary of a guide.

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