For a long time, I assumed offering home delivery was automatically good for my business.
Customers like convenience. They do not always want to leave their homes to pick up an order. If somebody is willing to pay for a product, why make them come to the shop when I can simply send the product to them?
That was how I looked at delivery when I first started offering it.
The problem was that I had never actually calculated what delivery was costing my business.
I knew customers were paying delivery fees, so I assumed the delivery cost was being covered. But when I started looking at individual orders, I realised that the situation was not quite that simple.
Sometimes the customer paid a delivery fee that covered the rider's charge.
Sometimes I absorbed part of the delivery cost because I wanted to close the sale.
Sometimes the delivery fee was negotiated.
There were also failed deliveries, customers who were unavailable when the rider arrived, changes of address and situations where I had to send a rider back to the same area.
At the same time, I had customers who preferred to pick up their purchases directly from my shop.
So I decided to run a simple 30-day experiment.
For one month, I tracked the cost and performance of two options:
Home delivery
and
Customer pickup
The goal was not simply to find out which option customers preferred.
I wanted to know which one was better for my business after considering the actual costs, the time involved, failed orders, customer convenience and the effect on sales.
The results were more interesting than I expected.
Why I Decided to Compare the Two Options
My shop is a small retail business in Lagos, and most of my customers live in different parts of the city.
Some customers are relatively close to the shop. Others are several kilometres away.
This creates an interesting problem.
A customer may genuinely want to buy from me but may not want to spend several hours travelling through Lagos traffic just to collect a small package.
At the same time, sending every order out for delivery can become expensive.
Lagos traffic also makes delivery times difficult to predict. A journey that looks short on a map can take much longer during a busy period.
Before my experiment, I mostly handled delivery on a case-by-case basis.
If the customer was close, I might charge a small delivery fee.
If the customer was buying several products, I might reduce the delivery charge.
Sometimes I offered free delivery as an incentive.
The problem was that I had no consistent way of knowing whether these decisions were helping or hurting the business.
I needed actual numbers.
How I Ran the 30-Day Test
For the experiment, I tracked orders for 30 days.
I recorded the order value, whether the customer picked up the product or requested delivery, the amount paid for delivery, the actual delivery cost, the distance involved and whether there were any problems with the order.
I also recorded the time spent dealing with delivery issues.
I did not expect every order to be identical.
That would not be realistic.
Some customers bought one item.
Others bought several items.
Some lived nearby.
Others were much farther away.
The purpose was to look at the overall pattern.
During the 30-day period, the shop received 124 completed orders.
Of those orders:
68 customers collected their purchases themselves.
56 customers requested home delivery.
That meant approximately 55 percent of the completed orders were customer pickups, while about 45 percent involved delivery.
At first glance, the difference did not look significant.
The interesting part came when I started looking at the money.
What Customer Pickup Cost Me
Customer pickup was the simpler option.
The customer came to the shop, paid for the order and collected the product.
There was no rider fee.
There was no fuel expense for delivering the order.
There was no waiting for a rider.
There was also no risk of the customer being unavailable when the rider arrived.
Of course, customer pickup was not completely free from a business perspective.
Someone still had to prepare the order.
The product had to be packaged.
The customer had to be attended to.
But those activities were already part of running the shop.
For the 68 pickup orders, I estimated that packaging and preparation cost approximately ₦350 per order.
That gave me:
68 × ₦350 = ₦23,800
So my direct preparation cost for the pickup orders was approximately ₦23,800.
The customers handled their own transportation to and from the shop.
That meant the business did not have to pay for the journey.
The Numbers From Home Delivery Were Different
The 56 delivery orders were more complicated.
The average delivery charge paid by the customer was ₦3,000.
That produced:
56 × ₦3,000 = ₦168,000
At first, ₦168,000 looked like a lot of delivery revenue.
But then I compared it with what I actually spent on delivery.
The average amount I paid riders was approximately ₦2,700 per order.
For 56 orders:
56 × ₦2,700 = ₦151,200
That left only:
₦168,000 - ₦151,200 = ₦16,800
So across 56 deliveries, I was only retaining about ₦16,800 from the delivery charges themselves.
That worked out to just ₦300 per delivery.
This was the first number that made me rethink the way I had been looking at delivery.
I had been thinking of delivery charges as an additional source of revenue.
In reality, most of the money was simply passing through the business to pay for transportation.
But There Was Another Problem
The ₦300 difference per delivery did not tell the entire story.
There were other costs.
Packaging was still required.
For the delivery orders, I spent approximately ₦400 per order on packaging.
For 56 deliveries:
56 × ₦400 = ₦22,400
Now the calculation looked different.
Delivery fees received:
₦168,000
Rider payments:
₦151,200
Packaging:
₦22,400
That produced:
₦168,000 - ₦151,200 - ₦22,400 = -₦5,600
In other words, after the rider and packaging costs, the delivery charges actually left me with a small loss.
I was effectively subsidising delivery.
That was not necessarily a bad thing.
The important question was whether offering delivery was helping me generate more sales.
Delivery Was Not Just an Expense
This was where I had to be careful.
If I looked only at the delivery cost, I could easily conclude that delivery was a bad idea.
But that would ignore the reason customers were requesting it.
Some customers would probably not have bought from me if they had to travel to the shop.
That meant delivery could be viewed as a sales tool rather than simply a transportation service.
During the 30-day test, I asked customers who requested delivery whether they would have purchased the product if delivery was not available.
I did not ask every customer the same question in a formal survey, but I kept notes from conversations.
Out of the 56 delivery customers, approximately 18 said they would probably not have made the purchase if they had to come to the shop.
That was significant.
If those customers had not purchased, the business would have lost the product sales entirely.
How Much Were the Delivery Orders Worth?
The 56 delivery orders generated total product sales of approximately ₦1,092,000.
That means the average product order was worth:
₦1,092,000 ÷ 56 = approximately ₦19,500
This was important because the delivery cost was relatively small compared with the average order value.
Suppose I make a gross profit of 25 percent on an average ₦19,500 order.
That would be approximately:
₦19,500 × 25% = ₦4,875
If delivery costs me a few hundred naira after the customer's contribution, I may still have a worthwhile transaction.
This changed my thinking.
The question was no longer:
"Does delivery make money?"
The better question became:
"Does offering delivery generate enough additional sales to justify the cost?"
Those are two completely different questions.
Customer Pickup Had Another Advantage
Although delivery helped generate sales, customer pickup had an advantage that I had not considered carefully before.
Customers who came to the shop sometimes bought additional products.
This happened more often than I expected.
A customer might come to collect one item and notice another product while waiting.
Sometimes they would ask about something displayed nearby.
This created opportunities for additional sales.
During the 30-day period, I noticed that several pickup customers added something to their original order.
For example, a customer might have ordered a bag but then purchased a wallet after seeing it in the shop.
Another customer might come for one clothing item and leave with two.
These additional purchases were harder to generate when the entire transaction happened remotely.
My Average Pickup Order Was Slightly Higher
The 68 pickup orders generated approximately ₦1,462,000 in product sales.
That gave an average order value of:
₦1,462,000 ÷ 68 = approximately ₦21,500
That was about ₦2,000 higher than the average delivery order.
This did not mean pickup customers were automatically better customers.
There were many reasons for the difference.
Customers who came physically could see other products.
They could compare colours and sizes.
They could ask questions.
They could discover products they had not originally planned to buy.
The physical shopping experience created opportunities that were missing from a delivery-only transaction.
The Cost of My Time
Another thing I started tracking was my own time.
This turned out to be one of the most important parts of the experiment.
Delivery problems could take a surprising amount of time.
A customer might call because the rider had not arrived.
A rider might call because the address was unclear.
A customer might send a different location after the rider had already started the journey.
Sometimes a customer was unavailable.
None of these things appeared on my monthly expense sheet.
But they consumed time.
During the 30-day period, I estimated that I spent approximately 17 hours dealing directly with delivery-related issues.
That included communicating with customers, coordinating riders, confirming addresses and resolving failed deliveries.
I did not put a specific naira value on those 17 hours because the value of my time varied depending on what I would otherwise have been doing.
But it made one thing obvious.
Delivery has an administrative cost, not just a transportation cost.
Failed Deliveries Were More Expensive Than I Expected
Out of the 56 delivery orders, four experienced significant problems.
One customer was unavailable when the rider arrived.
Two customers provided incomplete or confusing directions.
One customer changed the delivery location after the rider had already started travelling.
In three of these cases, the rider had to spend additional time travelling.
I paid an additional ₦2,000 in combined charges for these situations.
That may not sound like much.
But the bigger issue was the time involved.
A failed delivery can affect more than one order because the rider may become unavailable for another customer while dealing with the problem.
That made me realise that a good delivery system needs more than just a rider.
It needs accurate customer information.
I Started Confirming Addresses Before Dispatch
After the first few problems, I changed the process.
Before sending an order, I confirmed:
- Customer's full name
- Phone number
- Exact delivery location
- Nearby landmark
- Preferred delivery time
- Product being delivered
- Amount to be paid
- Delivery fee
This reduced confusion.
I also started sending the customer a message when the rider was on the way.
That simple step helped because customers knew when to expect the delivery.
The goal was not to eliminate every delivery problem.
That would be unrealistic.
The goal was to reduce preventable problems.
What Happened to My Overall Sales?
This was the part I was most interested in.
If delivery had increased my sales significantly, then absorbing some of the delivery costs might have been worthwhile.
During the 30-day test, the shop generated approximately ₦2,554,000 in product sales from the 124 orders.
The delivery customers contributed ₦1,092,000.
Pickup customers contributed ₦1,462,000.
At first, pickup appeared to be the clear winner because it generated more sales.
But there was another factor.
The number of pickup orders was also higher.
To compare the two fairly, I needed to look at average order value.
Average Order Value
Pickup: approximately ₦21,500
Delivery: approximately ₦19,500
Pickup was ahead by approximately ₦2,000 per order.
That suggested that customers who physically visited the shop were more likely to make additional purchases.
However, delivery was still responsible for almost ₦1.1 million in product sales during the month.
I could not simply remove that option and assume those customers would all start visiting the shop.
Some might.
Others probably would not.
What Did Delivery Actually Cost Me?
After the experiment, I calculated the direct cost of delivery.
| Delivery Cost | Amount |
|---|---|
| Delivery fees collected | ₦168,000 |
| Rider payments | ₦151,200 |
| Delivery packaging | ₦22,400 |
| Extra failed-delivery costs | ₦2,000 |
| Net delivery cost | ₦7,600 loss |
That meant delivery did not produce a direct profit during the test period.
I spent approximately ₦7,600 more on delivery-related expenses than I collected through delivery charges.
If I had looked only at that figure, I might have concluded that delivery was not worthwhile.
But that conclusion would have ignored the approximately ₦1.09 million in product sales associated with delivery orders.
The delivery system was therefore functioning more like a customer acquisition and convenience service than a profit centre.
What Customer Pickup Cost Me
Pickup was considerably simpler.
| Pickup Cost | Amount |
|---|---|
| Product sales | ₦1,462,000 |
| Packaging and preparation | ₦23,800 |
| Delivery expense | ₦0 |
| Failed delivery expense | ₦0 |
| Direct fulfillment cost | ₦23,800 |
The direct cost was much lower.
Pickup also required less coordination.
There was no rider to contact and no delivery address to confirm.
Customers arrived, collected their products and left.
From an operational perspective, pickup was clearly easier.
So Which Option Won?
After looking at the numbers, I realised that I had been asking the wrong question.
There was no single winner.
Customer pickup was the cheaper fulfillment method.
It had lower direct costs, fewer complications and slightly higher average order values.
But home delivery served a different purpose.
It made the business accessible to customers who were too far away, too busy or simply unwilling to travel to the shop.
If I removed delivery completely, I might save a small amount of money on fulfillment.
But I could also lose customers who value convenience.
That led me to a compromise.
What I Changed After the Experiment
I decided not to eliminate either option.
Instead, I changed the way I offered them.
Customer pickup remained the default option for customers who were close enough to visit the shop.
For delivery customers, I became more careful about pricing.
I stopped treating free delivery as something I could offer casually.
If I offered free delivery, I wanted the order value to justify it.
For smaller orders, the customer would normally pay the delivery charge.
For larger orders, I could consider reducing the delivery fee.
I also started encouraging customers who lived nearby to collect their orders.
This helped reduce unnecessary delivery expenses.
I Introduced a Minimum Order for Free Delivery
One of the most useful changes was introducing a minimum order value for free delivery promotions.
For example, instead of offering free delivery on a ₦5,000 purchase, I could set a minimum purchase amount of ₦30,000.
The idea was simple.
If I was going to absorb a delivery cost, I wanted the customer to generate enough gross profit to make the expense reasonable.
This also encouraged customers to add another product to their order.
It changed the conversation from:
"Can you deliver this for free?"
to:
"How much more do I need to add to qualify for free delivery?"
That was a much healthier position for the business.
What I Learned About Customer Behaviour
The biggest lesson from the experiment was that customers do not all value the same thing.
Some customers care primarily about price.
Others care about convenience.
Some enjoy visiting a physical shop and seeing products before buying.
Others would rather place an order from their phone and wait for it to arrive.
Trying to force every customer into one fulfillment method would therefore be a mistake.
The better approach is to understand the different types of customers.
A customer who lives five minutes away may happily collect an order.
Someone living across Lagos may consider delivery part of the reason they are buying from the business.
Both customers are valuable.
They simply have different needs.
The Numbers Changed My Pricing Decisions
The experiment also made me more careful about product pricing.
Before this test, I sometimes calculated profit using only the purchase price of the product.
That was incomplete.
If I sold a product for ₦20,000 and bought it for ₦14,000, I might initially think I had ₦6,000 available as profit.
But there could be packaging, payment costs, delivery subsidies, marketing expenses and other operating costs.
The delivery experiment reminded me that the selling price needs to support the entire business operation.
That does not mean every customer should be charged a huge delivery fee.
It means the business owner should know what the transaction actually costs.
What I Would Recommend to Another Small Business Owner
If I were advising another small retailer in Lagos, I would not tell them to choose delivery or pickup based purely on what other businesses are doing.
I would recommend running their own small test.
Track the number of pickup orders.
Track the number of delivery orders.
Record the average order value for each.
Record the actual delivery cost.
Record the amount customers contribute toward delivery.
Then track failed deliveries, refunds and additional purchases.
After 30 days, the picture should be much clearer.
The most important number is not necessarily the delivery fee.
It is the total cost of fulfilling the order compared with the profit generated by the order.
That is the number that tells you whether your system is working.
My Final Verdict After 30 Days
If the question is simply:
Which option cost my business less?
The answer is customer pickup.
Pickup required less money, less coordination and less time.
It also produced a slightly higher average order value in my 30-day test.
But if the question is:
Which option is better for my business?
The answer is more complicated.
I would keep both.
Home delivery helped me reach customers who might not have purchased otherwise. Even though the delivery service itself did not make much money, it supported more than ₦1 million in product sales during the test period.
That made it difficult to call delivery a failure.
Instead, I needed to manage it better.
The experiment showed me that delivery should not automatically be treated as another product that needs to generate a profit on its own.
Sometimes the value comes from the sale that delivery makes possible.
At the same time, that does not mean a business should absorb unlimited delivery costs.
If the delivery fee is too low, the order value is too small or failed deliveries become frequent, the service can quietly eat into profit.
The Bottom Line
Before conducting this experiment, I thought home delivery was simply a convenience I offered customers.
After tracking it for 30 days, I realised that it was actually part of my business model.
Customer pickup was cheaper and easier to manage.
Home delivery was more expensive and required more coordination, but it allowed me to serve customers who might not have visited my shop at all.
The biggest mistake would have been choosing one option simply because it appeared cheaper.
Instead, I learned to look at the entire transaction.
How much did the customer spend?
How much did the product cost me?
How much did packaging cost?
How much did delivery cost?
Did the customer buy anything else?
Would the customer have purchased without delivery?
How much time did the order require?
Those questions gave me a much better picture of what was actually happening.
My final decision was to keep both options but stop treating them equally.
Pickup became the lower-cost option I encouraged whenever practical.
Delivery became a paid convenience service, with free or discounted delivery reserved for orders large enough to justify the expense.
For a small business, that balance made more sense than trying to eliminate delivery completely.
The biggest lesson was simple: the cheapest way to fulfil an order is not always the most profitable way to make the sale.
Sometimes paying a little more to make buying easier can bring in a customer who would otherwise never buy.
But if you do not track the numbers, you may never know whether that convenience is helping your business or quietly reducing your profit.
That is why I would recommend doing what I did.
Run the numbers for 30 days.
Compare delivery with pickup.
Look beyond the delivery fee.
And make the decision based on what actually happens in your own business, rather than what you assume should happen.