Exorbitant delivery charges killing small businesses


Some few years back, specifically, just before the pandemic, Hafsa Ibrahim, a sales executive of a small business which produces and packages black pepper sauce, popularly known as ‘shito’, said she could get a delivery service at a cost of between GH¢15 and GH¢20 within Accra. But now, prices have more than doubled, thereby, affecting the flow of business.

“Sales keep dropping. Customers are constantly cancelling orders and they are not buying due to high delivery charges these days. For example, a dispatch could charge between GH¢30 and GH¢35 to deliver a GH¢30 worth bottle of pepper sauce from Lapaz to Madina in Accra. From Accra to Kasoa, Tema and Abokobi, for instance, one could pay between GH¢35 to GH¢50 or even more.”

For most of these businesses, their patronage and sales heavily rely on delivery as they cannot afford a shop where walk-in customers can come and buy, hence, operating from home.

And for some, even though they have a specific location where customers can find them, they have become acclimatised with the change the pandemic brought where many businesses employed delivery services to facilitate trade, making it now a part of the service they provide.

But the exorbitant fees charged by delivery services have made doing business now no longer exciting as there is no definite benchmark for determining price, thereby, discouraging online purchases.

Owner of Tee’s Haven, Faustina Agbeli, who deals in the retail of male and female undergarments in Accra, shared her ordeal with the B&FT, saying: “Sometimes, you can stay for as long as two weeks and nobody has bought from you [from online request], simply because of delivery fees.

“The high cost of delivery affects our business because at the end of the day, the client would not want to buy. For example, somebody buys a product for GH¢40 and has to pay a delivery fee of same equivalence or even GH¢30; this deters the person from buying, and it is not helping the business at all.

“They charge too high; I do not know where some of them get their pricing from. For example, somebody will charge GH¢60 from Nungua to McCarthy Hills, and GH¢70 from Accra to Tema, and you wonder how much the client even bought the item for. Sometimes, Ubers and Bolts are even cheaper and faster.”

For Ama Owusua, CEO of The Redbutterfly Enterprise, who deals in the production and sale of cosmetics, even though the convenience of delivery services makes things easier, the fee factor is posing as a threat to her business and other SMEs as well.

“It is honestly the best service as anyone can sit at the comfort of their homes and purchase anything they want; it is very convenient for especially busy people.

“But now delivery charges have gone overboard, so clients are beginning to refrain from asking products to be sent to them. Some find the time to actually come and purchase, but many of them decide to buy alternative products near their locations,” she added.

Other business owners, such Hadiya Ali Prah, the CEO of Hap Foods, an agro-processing company, says she sometimes has to bear part or whole cost of the delivery charges just to sell her products as customers are not willing to add that to their cost.

Businesses are not the only ones crying about exorbitant delivery cost as some individuals who patronise their services say they have either stopped using them or have reduced soliciting their services due to their high charges.

“I will continue using it but not always; it will always depend on the cost of the product. For instance, if I have to pay a delivery fee of GH¢30, then the product should cost GH¢200 or more,” Rahma Suleiman told the B&FT.

“If I can just drive to somewhere around Botwe or even Haatso [suburbs of Accra] and pick up a bottle of GH¢30 or GH¢40 product, I would prefer that to ordering a GH¢40 worth of product and having a delivery guy charge me GH¢20 or GH¢30,” Hussein Yorda, a resident of Madina, also a suburb of Accra, said.

What the delivery services say

Asked about why delivery charges have increased in just a short space, Apex Courier Services, a delivery company, in an interview with the B&FT, said a number of factors – which include fuel cost, location and the road network – are responsible for it.

“There are a lot of factors that go into delivery charges; one is the fuel price and the location. A lot of roads in this country are unmotorable, so it depends on the location. These motor bikes are machines and if they do ply these roads, it comes at the expense of the delivery company, so we factor all that in when we are giving a price for delivery,” Dispatch Supervisor, Yolander Jessica Parker-Allotey, said.

She, however, added that her outfit has introduced some packages to help businesses and their clients to reduce cost of delivery. This include businesses subscribing to a monthly package where daily bulk deliveries are made at reduced cost.

“That one is lesser because we want to help grow businesses by delivering at reduced prices. It is designed for those who do bulk deliveries on daily bases. For instance, with the regular deliveries, our least charge is GH¢20 within Accra, but with the Prime, you can pay as less as GH¢10. It is a fixed amount calculated over the month, and subject to renewal. Again, the business owner is assigned a specific rider who always does their deliveries daily.”

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