What is the pricing structure for delivery solution for courier service like India (like first flight, DTDC, Blue Dart etc) for a small scale eCommerce start-up?

I have answered a similar question before and here is what I have to say. Hope it helps. Tying up with right courier services generally depends on: 1. Volume of your business 2. Cities your serve in If you have high volumes of orders to serve in a day and in various cities, then you can select your courier/shipping services based on the areas/cities. For example: If you have total of 1000 orders to be delivered in a day, out of which you have 200 orders as local orders and 800 as outstation orders, then you can select local couriers or have your own fleet to serve the local 200 orders. This will also help you to serve the customer at a faster rate thus increasing the customer retention and also your own fleet would increase the awareness of your brand. Plus your cost of shipping will be reduced when you are using local couriers rather than national/international ones. For rest of the 800 outstation orders you can select any bigger courier services like Bluedart, Aramex, First Flight, DTDC, etc. (these are the most common courier services used by eCommerce in India). Again you can further divide those 800 orders into different couriers based on who charges less for COD order delivery. Its an exhaustive task to manage your courier companies but once you do it, you will save a lot on your shipping and will make it more efficient. There are few ERP products in the market which takes care of your courier/transport management based on the priority, distance, type of orders, etc.

Dealing with these courier companies is a volumes game. They Do Not Know What A Startup Is. Repeat after me, you are not building a startup, you are building a business. You are not building a startup, you are building a BUSINESS. And that's how you will have to crack deals with courier companies. If the sales person is friendly, you can get a good rate. I remember getting quotes from two different areas of BlueDart in 2006 and one of them gave a significantly lower quote, perhaps he had a quota to fill or he liked us or believed that our business will scale quickly and give him good returns. In many ways, you need to convince the courier guy that your business will get them good volumes in upcoming months. Also, if you are signing up at a particular rate, you would want to ideally take an assurance from them on better pricing when volumes increase. Take a commitment based on a milestone billing on day one. This gives you predictability. At the same time, once you are doing say Rs 10,000 worth of business with Aramex, show that bill to DTDC. Or when you are doing say 25,000 worth of business with Aramex and DTDC, show that to BlueDart and tell them this would come to them. Now here are some reliable companies to deal with (in descending order of how much they cost): Aramex (we paid less than Rs 30 for 500 gms at a point in time. I am sure similar rates persist) TNT (little over Rs 30 for 500gms). I heard they have stopped local shipments recently. Please check. BlueDart (after initial business for high value products in 2006, used only in rare cases without contract) Many use DTDC, TrackOn, OnDot, Overnight etc. But I do not trust them. Delayed and lost parcels is not a head-ache you want. (Please share any recent experiences if you have with these cos).

If you are a small scale eCommerce startup, using courier services can prove to be very costly at times. You need to make sure that the margins are good enough for you to continue using a particular service, yet make sure that the service is reliable. For this, you should prefer using a logistics aggregator, which have tie ups with different courier services and provide discounted rates specifically for eCommerce startups. One such aggregator is AVN Logistics, which has partnered with http://www.zepo.in/ (an eCommerce platform) to provide the most discounted rates for eCommerce startups. You can choose from FedEx and Gati to ship your orders to over 8800 pincodes all over India and also to the rest of the world. The services come at dirt cheap rates compared to using individual courier companies to ship your products. To know more about the rates of AVN Logistics and the area covered by them, you can read it here: http://www.zepo.in/blog/2014/02/06/zepo-avn-logistics-extensive-pincode-coverage-lowest-logistics-rates-ecommerce-businesses/ You can also compare them with other aggregators in the industry here: http://www.zepo.in/blog/2014/02/06/zepo-avn-shiprocket-logistics-rates-compared/

For small sizes, it is weight based and for large sizes, it is volume based. Some courier companies divide the delivery in zones and have different pricing for different zones. The prices can be negotiated quite a bit and one strategy is to try the following (if you are not Venture funded) : 1) Start with one of them - dont worry too much about cost initially 2) Once you have got a reasonable amount per month that you are paying to the courier company (this amount depends on the location you are based), take the bill and go to another courier (hopefully a better one) and negotiate based on that. 3) Once you have got some scale, use more than one courier and incentivise based on customer service and cost. At that point, you are a valuable customer and they are after your business rather than the other way round and you can concentrate on your core competency. If you are venture funded, ask the VCs and they should be able to get you a really good deal. The above strategy should work for payment gateways too.

Not necessarily. We at http://ShipRocket.co aggregate all orders for merchants on our contracts and are able to extend the same low rates to everyone. Whether you do 5 orders a day or 500! Pls see the link for more info