Understanding Delivery Radius: How Far Should Your Local Shop Deliver?

# Understanding Delivery Radius: How Far Should Your Local Shop Deliver?

Your delivery radius defines your digital market size. Too small, and you don't have enough potential customers. Too large, and delivery costs eat your margins while speed suffers.

The Data: What Works

Based on operational data from local merchants across Maharashtra:

Our Recommendation: Start at 2-3 km

For most neighbourhood stores in Indian cities and towns:

• **2 km radius** covers approximately 12,000-50,000 people (depending on population density).
• **Delivery time stays under 30 minutes**, which is the threshold for customer satisfaction.
• **Delivery cost stays under ₹25**, which is economical for orders above ₹250.

When to Expand Your Radius

Expand to 4-5 km when: - You're consistently getting 10+ orders daily within 2-3 km - You have 2+ dedicated delivery persons - Customers from the expanded area are requesting delivery through WhatsApp or calls - You've optimized your packing and dispatch to under 10 minutes

Radius by City Type

### Metro Cities (Mumbai, Pune) Start with 1.5-2 km. Population density is so high that even a small radius covers massive demand. Traffic congestion makes wider delivery impractical.

### Tier-2 Cities (Nagpur, Nashik, Kolhapur) Start with 2-3 km. Moderate density with manageable traffic. This covers most residential areas around your commercial location.

### Tier-3 Towns (Yavatmal, Wardha, Washim) Start with 3-4 km. Lower population density means you need a wider radius to reach enough customers. But traffic is minimal, so delivery times remain fast.

The Economic Threshold

Calculate your break-even point:

If your average order value is ₹400 with 12% net margin = ₹48 profit per order. If delivery cost at 3 km = ₹25. Net after delivery = ₹23 profit.

If delivery cost at 5 km = ₹40. Net after delivery = ₹8 profit — barely worth it.

Expand radius only when you can maintain positive unit economics on every delivery.