Your organization is an Indian daily need delivery startup. This startup was founded by Sam Malhotra & Rajish Gupta in 2020. Sam comes from a business background; his father is a traditional banana silk trader, while Rajish comes from a middle-class family; his father and mother are Govt. school teachers. They met while pursuing their MBA and decided to pursue entrepreneurship instead of a job. They arranged INR 15 lakhs as seed capital from their family and friends and started "Daily Needs Delivery LLP" (in short, DND)..
DND uses an app-based ordering system where customers can order for their daily needs, manage or subscribe for monthly deliveries, mark dates when they don't need delivery, the app has the features of wallet payment, refer services to friends and family, delivery calendar, and the DND consumer app uses BHIM UPI for wallet recharge.
DND has a presence in 3 cities, Bengaluru, Delhi, and Hyderabad, as of February 20, 2023. Their product delivery range has mainly 3 products as of now 1- Milk, 2- Paneer (cottage Cheese) & 3- Curd. Their total Milk Supply stands at 6000 Liters per day (4000 Liters Buffalo and 2000 Liters Cow, On an average 1.5 Ltr milk per family/per day), in most parts of the country people also order curd daily. DND's daily sales of curd stand at 250 Kg Curd / Daily, (On an average 25% of their customer base ordered 250 gms curd / per day) & They also supply 750 Kg Paneer/Month (On an average 25% of their customer base ordered 250 gms paneer thrice in a month).
Their delivery starts @ 5 AM in the morning and lasts till 8 AM, they have a hyper-local delivery partner team of 80 people. Whereas they have a corporate office team of 10 people in Bengaluru (including 3 salespeople, 1 for each city). The average delivery person salary is 8000Rs/ Month and Salary average of corporate office employee 50000/month.
Statistics:
| City | Number of families | Milk | Curd | Paneer | |
|---|---|---|---|---|---|
| Cow(ltr) | Buffalo (ltr) | ||||
| Sales Price | INR 45 Per Ltr | INR 50 Per Ltr | INR 120 Per Kg | INR 250 Per Kg | |
| Bengaluru | 1200 | 600 Ltr | 1200 Ltr | 75 Kg | 7.5 Kg |
| Hyderabad | 800 | 400 Ltr | 800 Ltr | 50 Kg | 5 Kg |
| Delhi | 2000 | 1000 Ltr | 2000 Ltr | 125 Kg | 12.5 Kg |
| Total | 4000 | 2000 Ltr | 4000 Ltr | 250 Kg | 25 Kg |
| Daily Cost of Purchase | INR 80000 | INR 180000 | INR 25000 | INR 5625 | |
| Daily Sales | INR 90000 | INR 200000 | INR 30000 | INR 6250 | |
| Total Daily Cost of Purchase | INR 290625 |
| Total Daily Sales | INR 326250 |
| Monthly Cost of Purchase | INR 8718750 |
| Monthly Sales | INR 9787500 |
| Annual Sales FY 2021-22 | INR 117450000 |
| Annual Sales FY 2020-21 | INR 67211000 |
| Employee FY 2021-22 | 90 (10 Corporate + 80 Delivery Partners) |
| Employee FY 2020-21 | 50 (8 Corporate + 42 Delivery Partners) |
| App Install | Active | Inactive |
|---|---|---|
| App Install FY 2021-22 | 4000 | 321 |
| App Install FY 2020-21 | 2500 | 82 |
| Other Details | |
|---|---|
| Delivery Boy Salary | INR 8000 Per Month |
| Corp office average salary | INR 50000 Per Month |
| Cow milk Cost of purchase | INR 40 ltr |
| Buffalo Milk Cost of purchase | INR 45 ltr |
| Curd Cost of purchase | INR 100 kg |
| Paneer Cost of purchase | INR 225 kg |
| Avg. Monthly Operating Cost | |
|---|---|
| Salary | INR 1140000 |
| Purchase | INR 8718750 |
| Advertisement | INR 200000 |
| Other Overheads | INR 300000 |
| Total | INR 10358750 |
Challenges:
The corporate office received several complaints from consumers regarding missing deliveries. When the office investigated delivery partners, they claimed that they had delivered scheduled products to the doors of consumers, but consumers claimed that they had not received them.
Another issue corporate offices are facing is that delivery partners suddenly don't report to duty in the morning, and deliveries in their areas get affected, resulting in business and product loss. Sometimes they have also gotten feedback from consumers that deliveries were of the wrong or missing products. Rajish thinks that complaints are only getting a fraction of consumer feedback, as there might be many cases where consumers don't find the email ID of the corp office or do not find time to raise complaints.
Sometimes, consumers also have complaints regarding foul smells and bad taste.
Another problem area for DND is losses due to the perishable nature of products. On average, DND is losing 0.2% of sourced inventory quantity due to this reason.
Salespeople informed the corporate office that services to subscribers that they have sold in non-dense areas have not been started yet. Subscribers are on the verge of uninstalling the app and claiming refunds for wallet recharges. In reality, the organization is hesitant to start service in non-dense areas as it will not even recover the cost. Some traditional competitors and new entrants have started taking advantage of these situations.