Delhivery has a First-mile, Last-mile network delivery model which enables the company to operate with very high margins.
The First-mile is the point at which Delhivery picks up a package from the merchant and the Last-mile is the point at which the package is delivered to the customer.
In between these two points, Delhivery sort and consolidate packages into larger units called ‘shipments’. This process allows Delhivery to optimize its transportation costs by shipping more packages in each ‘shipment’.
Moreover, because each ‘shipment’ contains packages destined for different locations, Delhivery can leverage its network to deliver each ‘shipment’ to its final destination using the most cost-effective route.
As a result of this unique business model, Delhivery is able to earn high margins on each delivery it makes.
How Delhivery Delivered its Way to a Billion Earn Money?
How does Delhivery make money? The simple answer is that it earns a profit on every unit it delivers. The company has likely always been unit economically profitable.
The real constraint that these logistics businesses face is the infrastructure and people costs they have to incur before they can set up a network.
The goal of Delhivery has been to build an end-to-end solution for e-commerce logistics.
This network includes: –
- First-mile pickup service to collect packages from sellers
- Last-mile delivery service to get packages to buyers
- A reverse logistics service to handle returns To build this network, Delhivery has had to invest heavily in infrastructure and people.
The company has built a fleet of vehicles, warehouses, and sorting centers. It has also hired thousands of people to staff these facilities and provide customer service.
These investments have not been cheap, but they have allowed Delhivery to become one of the leading logistics providers in India.
Thanks to its early investment in infrastructure, Delhivery is now positioned to generate significant profits as eCommerce continues to grow in India.