Starting Your Delivery Business in Nigeria: A Step-by-Step Guide

by Counseal Team

Updated January 20, 2024

Starting Your Delivery Business in Nigeria

The rise of e-commerce and the growing need for convenience has created a boom in the delivery business sector in Nigeria.

But why should you, as an entrepreneur, consider this opportunity?

In this article, we will explore the current state and future prospects of the delivery business in Nigeria.

We will also provide some tips and insights on how to start and grow a delivery business in Nigeria, based on the experiences and best practices of some of the leading delivery companies in the country. 

Let’s dive in!


Quick Takes

How much does it cost to start this business?

Starting a delivery business in Nigeria can be a profitable venture, as there is a high demand for fast and reliable delivery services. The cost of starting a delivery business in Nigeria depends on several factors, such as:

  • The scale of your business: You can start a small-scale delivery business with just one or a few delivery bikes or trucks, or you can start a large-scale delivery business with a fleet of vehicles and a network of branches.
  • The type of delivery service: You can offer different types of delivery services, such as courier, express, parcel, freight forwarding, or warehousing. Each type of service has different requirements and costs.
  • The location of your business: You will need to find a suitable location for your business, such as a warehouse, an office, or a shop. The location will affect the rent, utilities, and security costs of your business.
  • The registration and licensing of your business: You will need to register your business name and obtain the necessary permits and licences from the relevant authorities, such as the Corporate Affairs Commission, the Federal Inland Revenue Service, the National Agency for Food and Drug Administration and Control, and the Federal Road Safety Corps. The registration and licensing fees will vary depending on the type and size of your business.
  • The equipment and supplies of your business: You will need to purchase or lease the delivery vehicles, such as bikes or trucks, and equip them with the necessary tools, such as cell phones, GPS systems, maps, and clipboards. You will also need to buy or rent the delivery boxes, bags, labels, and other supplies. The equipment and supplies costs will depend on the quality and quantity of the items.
  • The marketing and advertising of your business: You will need to promote your business and attract customers, using various methods, such as flyers, banners, social media, websites, or referrals. The marketing and advertising costs will depend on the strategy and frequency of your campaigns.

You can start a delivery business in Nigeria with as little as ₦350,000 and expand with time. However, this is just an estimate and the actual cost may vary depending on your specific situation and goals.

How much can you make per month?

This depends on various factors, such as the type of delivery service, the number of customers, the location, the competition, and the operating costs. 

However, the online food delivery market in Nigeria is expected to achieve a revenue of US$2.83 billion by 2024, and grow at an annual rate of 16.26% from 2024 to 2028.  

This market includes both grocery delivery and meal delivery services. The average revenue per user in the grocery delivery market is projected to be US$55.08 in 2024, while the number of users in the meal delivery market is expected to reach 62.5 million by  2028.

Another source, Nairametrics, reports that Nigeria has the potential to become one of the biggest on-demand markets in the world, due to the increasing demand for convenience and variety in food choices. The article features Waive, a startup that aims to redefine the on-demand delivery market in Nigeria by offering food, drinks, groceries, and deliveries of any sort. Waive claims to have over 10,000 registered users and 500 partner merchants, and to deliver orders within 45 minutes.

A third source, ThisDayLive, states that Nigeria’s food segment is estimated to yield a revenue of about US$33.7 billion, and that Lagos residents spent N830 billion (about US$2 billion) eating out in 2019. The article also mentions that Jumia, an ecommerce market leader, has opened up a food delivery service in Nigeria, which offers over 6,000 restaurants and fast-food outlets across 11 cities.

Based on these sources, it seems that the delivery business in Nigeria is a lucrative and growing sector, especially in the urban areas. 

However, to estimate how much one can make per month from such a business, one would need to consider the specific details of their operation, such as the size, the scope, the pricing, the expenses, and the profit margin. 

A simple way to calculate the monthly income is to multiply the average order value by the number of orders per month, and then subtract the total costs. 

For example, if the average order value is N1,000 (about US$2.5), the number of orders per month is 1,000, and the total costs are N500,000 (about US$1,250), then the monthly income would be N500,000 (about US$1,250).

What is the minimum required to start this business?

The minimum required to start a delivery business in Nigeria may vary depending on the type of delivery service, the scale of operation, and the equipment needed. 

However, you can start a logistics company with as low as ₦300,000 (about US$750) if you are planning to do the deliveries by bike. You will need to purchase a motorcycle, a helmet, a cell phone, and a GPS system. 

You will also need to register your business, get insurance, and advertise your service.

You can begin a delivery business with just ₦100,000 (about US$250) or less, depending on the kind of delivery business you would want to venture in. 

For example, if you are in cake delivery, you do not need up to ₦100,000 to begin. You will need to have a reliable means of transportation, a good packaging system, and a strong customer base.

As you can see, the minimum required to start a delivery business in Nigeria can range from ₦100,000 to ₦350,000, depending on various factors. You will need to do your own research and planning to determine the exact amount that suits your business idea and goals.

What are the best states to start this business?

There are many factors that can influence the choice of the best states to start a delivery business in Nigeria, such as the market size, the demand, the competition, the infrastructure, the security, and the government support. 

Some of the best states for delivery business in Nigeria are:

  • Lagos: Lagos is the most populous and cosmopolitan city in Nigeria, with a large and diverse market for various goods and services. Lagos also has better infrastructure, reliable electricity, and internet services than many other states, which are essential for delivery operations. Lagos also offers various incentives and support for entrepreneurs and business owners, such as the CARES Grant Program.
  • Anambra: Anambra is one of the most industrialised and commercialised states in Nigeria, with a vibrant economy and a high demand for goods and services. Anambra also has a good road network, security, and a stable power supply, which are conducive for delivery business. Anambra also has a friendly and transparent regulatory environment, which makes it easy to start and run a business.
  • Ibadan: Ibadan is the largest city in West Africa and the third-largest in Nigeria, with a population of over 3 million people. Ibadan has a huge potential market for delivery business, as it is a major hub for trade, commerce, education, and culture. Ibadan also has a relatively low cost of living and doing business, compared to other cities like Lagos and Abuja. Finally, Ibadan’s proximity to Lagos, Nigeria’s economic hub, offers businesses the advantage of accessing a significant market and connecting with suppliers and clients in Lagos.

According to a report by the Presidential Enabling Business Environment Council (PEBEC), the top three states in Nigeria for ease of doing business in 2023 were Gombe, Jigawa, and Sokoto. 

These states scored high on indicators such as infrastructure, regulatory environment, transparency, and economic opportunities. Gombe, in particular, has been the number one state for two consecutive years, demonstrating its commitment to providing a conducive and friendly environment for businesses to thrive.

What are the known examples of this business?

Some of the known examples of delivery business in Nigeria are:

  • Topship: Topship is a delivery service that allows users to send and receive items from their doorstep to any location in the world at affordable rates. They offer local and interstate delivery within Nigeria, as well as international shipping from Nigeria to over 200+ cities worldwide. They also enable users to shop from UK & US online stores and ship them to Nigeria.
  • Sendbox: Sendbox is a delivery platform that offers local and international deliveries for personal and business use. They also provide an integrated payment service and an e-commerce solution that allows users to create a free online store and sell products online.
  • Gokada: Gokada is an on-demand motorcycle delivery service and food ordering/delivery service available in Lagos. They use smart technology to connect users with nearby riders who can deliver their items quickly and safely.
  • Jumia Food: Jumia Food is a food delivery app that allows users to order food from a variety of restaurants and cuisines in Nigeria. They also offer discounts and deals on food orders, as well as convenient payment options.
  • Waive: Waive is a delivery company that aims to redefine instant shopping and delivery in Nigeria. They allow users to shop for anything from groceries and electronics to fashion and beauty products, and have them delivered within minutes. They also offer cash on delivery and flexible return policies.

Here’s why you should consider the delivery business: the delivery business is profitable, scalable, and has a relatively low entry barrier.

The Profitability Factor

In Nigeria, the delivery business has become a goldmine. With the country’s population exceeding 200 million people, the demand for delivery services is extraordinary. Every day, thousands of packages need to be moved from one place to another. Whether it’s a restaurant delivering meals, an online store delivering products, or an individual sending a parcel, the need for reliable delivery services is ever-present.

Scalability: Growing Your Business

One of the coolest things about starting a delivery business in Nigeria is its scalability. You can start small, with a single motorbike or van, and grow your business as demand increases. As you establish a reputation for reliability and excellent customer service, your customer base will expand. And as your customer base expands, so too does your profit margin.

Low Entry Barrier: Making a Start

Unlike other business ventures that require huge capital investment, starting a delivery business in Nigeria is relatively affordable. The fundamental requirement is to have a reliable means of transportation. This could be a motorcycle, a tricycle, or a van, depending on the size and volume of deliveries you plan to handle.

How to Start a Delivery Business in Nigeria

Now that we’ve established the why, let’s dive into the how. How do you start a delivery business in Nigeria? Here’s a step-by-step guide:

  1. Business Plan: Every successful business starts with a solid plan. This should include your business goals, target market, operating procedures, and financial projections.
  2. Business Registration: Register your business with the Corporate Affairs Commission (CAC). This gives your business a legal standing and opens doors for more opportunities.
  3. Acquire a Vehicle: Depending on your capital, you can either purchase or lease a vehicle for your delivery business. Remember, your vehicle is the heart of your business, so choose wisely.
  4. Hire Staff: Depending on the size of your operation, you might need to hire drivers and support staff. Ensure they are trained and understand the importance of customer service.
  5. Marketing: Let people know about your business. Use social media, flyers, and word of mouth to get the word out about your new delivery service.
  6. Build Relationships: Establish strong relationships with businesses that need delivery services. This could be restaurants, online stores, or any business that needs to move products to their customers.

So, are you ready to make your move? Let’s get to the nitty gritty.

Step 1: Understand the Delivery Business in Nigeria

An image depicting the delivery business in Nigeria

Making sense of  the delivery business in Nigeria is like learning a new dance – it’s all about rhythm, action, and learning the right moves. And just like a dance, the delivery industry in Nigeria is vibrant, dynamic, and filled with potential.

A Closer Look at the Delivery Industry in Nigeria

As a country with a population of over 200 million people, Nigeria is a fertile ground for businesses. The Nigerian delivery industry, in particular, has seen unprecedented growth in recent years. 

According to data from the National Bureau of Statistics, the courier and delivery services sector contributed about N300 billion to Nigeria’s GDP in 2019. That’s a lot of deliveries and a lot of potential!

But before you leap into the dance, it’s imperative to understand the lay of the land. The delivery industry in Nigeria is not just about dropping off packages. 

It encompasses a broad range of businesses – from food delivery to e-commerce logistics, to bespoke courier services. 

Each of these segments has its unique dynamics, challenges, and opportunities.

The Different Types of Delivery Businesses in Nigeria

When you think of deliveries in Nigeria, what comes to mind? Is it the fast-paced dispatch rider weaving through Lagos’ notorious traffic? Or is it the food delivery guy bringing a steaming hot pizza to your doorstep on a rainy evening?

The beauty of the delivery industry is its versatility. Let’s take a look at some of the key players:

E-commerce Delivery Services

These are the heavyweights of the delivery business – the likes of Jumia and Konga. These platforms rely heavily on efficient delivery systems to get products from sellers to buyers. The upside? High volume and steady demand. The downside? It’s a highly competitive space, and customer expectations are high.

Food Delivery Services

Who doesn’t love a good meal delivered right to their doorstep? Companies such as Jumia Food and Nkataa are capitalising on this market. Food delivery is a lucrative niche, but it requires speed, reliability, and excellent customer service.

Courier and Dispatch Services

These businesses cater to the needs of corporate entities and individuals who require swift, secure delivery of documents and packages. They’re the backbone of business operations, facilitating smooth transactions. However, they can be capital intensive to start, and the pressure to deliver on time is immense.

Bespoke Delivery Services

These are the niche delivery services tailored to specific needs – think laundry pick-up and delivery, grocery shopping, or even errand services. These businesses thrive on convenience and personalization, but they may require more effort to market and scale.

Step 2: Start a Delivery Business in Nigeria

An image of the different types of delivery business

So, which dance is right for you? The answer lies in your resources, your skills, and your passion. Each type of delivery business has its pros and cons, and understanding these is crucial to making the right decision.

Are you drawn to the high-stakes, high-reward world of e-commerce deliveries? Or does the personalised service of a bespoke delivery business appeal more to your entrepreneurial spirit? 

Maybe the thrill of a courier service is what gets your blood pumping, or the sizzling potential of a food delivery service is too good to pass up.

Whatever your choice, remember that success in the delivery business hinges on efficiency, reliability, and exceptional customer service. 

So, put on your dancing shoes, and let’s make some beautiful moves in the delivery business in Nigeria!

Business Planning

Starting a delivery business in Nigeria is like constructing a building. You need a blueprint to guide you, and that blueprint is your business plan. As an entrepreneur, your business plan should be the first thing you draw up before you even think about making your first delivery.

So, how does one create a business plan for a delivery business?

First, you need a clear vision. What are your objectives? What kind of delivery services do you want to provide? Who are your target customers? Once you have these defined, the rest of the plan will flow from there.

Second, you need to consider your operational strategy. How will your business run on a day-to-day basis? What equipment will you need? What are your staffing requirements?

Third, don’t forget about the financials. This includes your start-up costs, projected income, as well as your profit and loss projections.

Not sure where to start? Don’t worry, we’ve got you covered. Here’s a sample business plan for a delivery business to help you get started.

Funding Your Delivery Business

Now that you have your business plan, the next step is funding. There are many ways to fund a delivery business in Nigeria, from personal savings to loans, investors, and grants.

Each funding option comes with its own pros and cons. For instance, using personal savings may mean zero interest, but it could also deplete your safety net. Loans, on the other hand, can provide a significant amount of money but come with interest rates and repayment terms.

So, how do you decide which funding option is best for you? The answer lies in your business plan. The financial section of your plan should give you a clear picture of how much you need and what your repayment capability is.

Setting Up Your Delivery Business

Once your funding is secure, it’s time to set up your delivery business. There are specific requirements for setting up a delivery business in Nigeria. These include registering your business with the Corporate Affairs Commission (CAC), obtaining necessary licences, and setting up your office or warehouse.

We’ve put together a handy checklist of things to do when setting up your delivery business in Nigeria. This checklist will guide you through the process, ensuring you don’t miss any vital steps.

Marketing Your Delivery Business

You’ve got your plan, your funding, and you’re set up. Now comes the fun part: marketing!

Marketing is the heartbeat of your delivery business. It’s how you attract customers and grow. To create a successful marketing plan, you need to understand your target audience. What are their needs? What are their pain points?

Once you know your audience, you can create marketing strategies that speak directly to them. For instance, if your target audience is busy professionals, you might want to highlight your quick and reliable delivery service.

There are numerous successful marketing strategies for delivery businesses in Nigeria. For instance, Nkataa, a popular online grocery store in Abuja, utilises social media and influencer marketing to reach its customers.

Remember, marketing is not a one-time event but a continuous process. Keep refining your strategies, learn from your successes and failures, and keep your customers at the heart of everything you do. This way, your delivery business is sure to thrive.

Step 3: Grow Your Delivery Business in Nigeria

An image of a business meeting

So, are you ready to start your delivery business in Nigeria? With careful planning, adequate funding, a solid setup, and effective marketing, you are well on your way to becoming a successful entrepreneur. Let’s get started!

Expanding Your Delivery Business: Navigating the Nigerian Terrain

Running a delivery business in Nigeria can be as thrilling as it is challenging. The buzz of the city, the hustle and bustle, the constant movement of goods and services – it’s a veritable beehive of commerce.

But, as any seasoned entrepreneur will tell you, growth is the ultimate goal. So, how can one expand their delivery business in this vibrant nation?

Diversifying Your Services

One of the most effective ways to grow your delivery business is by diversifying your services. This could mean venturing into new areas such as food delivery, parcel delivery, or even offering express delivery services. 

By doing this, you increase your customer base and open up new revenue streams. However, bear in mind that diversification comes with its challenges. 

It might require additional resources and might stretch your operational capacity. But as the old saying goes, “no pain, no gain.”

Franchising

Another way to expand is through franchising. This option allows you to grow your brand without having to manage multiple branches yourself. The franchisee takes on the risk and responsibility of running the business, while you benefit from the franchise fee and a slice of the profits. 

However, it’s not all rosy. Franchising requires a solid business model and a strong brand. Plus, there’s the risk of franchisees damaging your brand’s reputation if they fail to maintain your standards.

Partnerships and Collaborations

Partnerships are an excellent vehicle for growth. By collaborating with other businesses, you can extend your reach and tap into new markets. For example, partnering with an eCommerce platform could mean steady business delivering products sold on their platform. 

But remember, partnerships are a two-way street. They require mutual benefit, trust, and a shared vision.

Challenges of Running a Delivery Business in Nigeria

Running a delivery business in Nigeria is not without its hurdles. From traffic congestion to unreliable power supply, and the often labyrinthine process of securing relevant permits, it’s a tough terrain to navigate.

Traffic Congestion

The infamous traffic jams in major Nigerian cities can be a nightmare for delivery businesses. They can lead to delayed deliveries and unhappy customers. But fret not! By implementing smart routing systems and leveraging technology, you can bypass these bottlenecks and ensure timely deliveries.

Unreliable Power Supply

The sporadic power supply can be a significant setback, especially if your business relies on cold storage. The solution? Invest in alternative power sources like solar or generators. It might seem costly at first, but it’s a worthy investment in the long run.

Regulatory Hurdles

Securing the necessary permits and licences can be a daunting task. But it’s crucial to operate within the confines of the law. Engage the services of a legal expert to guide you through the process.

Success Stories to Inspire You

Despite these challenges, many delivery businesses are thriving in Nigeria. For instance, GIG Logistics has grown from a single office in Lagos to over 70 branches across the nation. 

They’ve achieved this impressive growth through strategic partnerships, diversification, and a relentless focus on customer satisfaction.

In conclusion, growing your delivery business in Nigeria is certainly achievable. With the right strategies, resilience, and a little bit of ‘Naija’ grit, you can navigate the challenges and steer your business towards remarkable growth. 

Remember, every hurdle is a stepping stone to greater heights. So, roll up your sleeves, buckle up, and take that leap.

Almost everyone wants to be their own boss, right? But the path to entrepreneurship can be a bit maze-like, especially in a complex market like Nigeria.

Running a delivery business in Nigeria is no small feat, but with the right planning and execution, it’s more than achievable. So what are you waiting for? Take the leap, and let’s get started on your entrepreneurship journey together.

Frequently Asked Questions

What are the costs involved in starting a delivery business in Nigeria?

Starting a delivery business in Nigeria requires a significant capital investment. The costs involved include the cost of structuring your business, the cost of getting relevant licences and permits from the government, the cost of renting or acquiring a workshop and showroom, the cost of equipment and raw materials, running costs, salary expenses, marketing and advertising expenses, and the cost of creating a website or drafting a business plan (if you cannot do them yourself). With 2-3 million Naira in place, you should be able to get your delivery business up and running.

What are the different types of delivery businesses in Nigeria?

There are different types of delivery businesses in Nigeria, including courier services, food delivery businesses, medical supplies delivery businesses, pizza delivery businesses, and mail delivery businesses.

How can I fund my delivery business in Nigeria?

There are different ways to fund a delivery business in Nigeria, including personal savings, bank loans, grants, and venture capital.

What are the requirements for setting up a delivery business in Nigeria?

The requirements for setting up a delivery business in Nigeria include registering your business with the Corporate Affairs Commission of Nigeria (CAC), obtaining relevant licences and permits from the government, renting or acquiring a workshop and showroom, and acquiring the necessary equipment and raw materials.

How can I market my delivery business in Nigeria?

Marketing is essential for a delivery business in Nigeria. You can create a marketing plan for your delivery business by identifying your target audience, creating a brand identity, using social media platforms, attending trade shows and exhibitions, and offering discounts and promotions.

What are the challenges of running a delivery business in Nigeria?

The challenges of running a delivery business in Nigeria include high competition, lack of access to funding, poor infrastructure, and the high cost of raw materials and equipment.

How can I expand my delivery business in Nigeria?

There are different ways to expand a delivery business in Nigeria, including opening new showrooms, expanding your product line, exporting your products to other countries, and partnering with other businesses.

What are the best delivery business opportunities in Nigeria?

  • Some of the best delivery business opportunities in Nigeria include:
  • courier services, 
  • food delivery businesses, 
  • medical supplies delivery businesses, 
  • pizza delivery businesses, and 
  • mail delivery businesses

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