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Why does your business need a parcel delivery solution and how can you develop one?

Why does your business need a parcel delivery solution and how can you develop one?

Updated on March 09, 2022
12 min read

We are living in the digital age where everything is accessible at the few taps of our phone. This has been made possible with the help of on-demand services that have replaced almost all the traditional businesses of several industry verticals. The parcel delivery industry is no exception.


Over the years, parcel delivery companies had to up their game to offer lightning-fast parcel delivery services to their customers. Furthermore, with COVID-19 pandemic, there has been a massive surge in the number of people using these services.

That’s the reason why this is the best time for anyone to come up with an on-demand parcel delivery solution. In this article we will discuss the market size of parcel delivery, its importance, business models, and its must have features.

Market size and statistics

The demand for on-demand parcel delivery solutions has massively increased in recent times. And one of the major reasons for it’s increase is the massive surge in the global parcel delivery volumes.

As of 2019, the global parcel delivery offers a mammoth $430 billion market opportunity. It’s important to note that this number was $380 billion in the year 2018. Not only this, the research also shows that there’s huge demand for developing a robust on-demand parcel delivery solution for all the parcel delivery businesses. Let’s have a look at a few more stats.

  • The overall parcel volume is estimated to reach 200 billion by the year 2025.
  • The U.S has the highest parcel revenue which is around $119 billion.

Since the demand for parcel deliveries is rapidly increasing in the US. Many companies have stood up to this challenge and are offering top-notch parcel delivery services. Due to this they are delivering massive package volumes. Below are the volumes of packages delivered by the top three parcel delivery companies:

Not only the established names, but even parcel delivery startups are exhibiting a promising future by raising a massive amount of funding. According to TechCrunch, Glovo, which is an on-demand delivery app like Uber has raised around $169 million in April 2019.

LINE man, a major player in Thailand is also growing at a rate of 300% with over 3 million users.

Shipping is one of the most important elements in the on-demand parcel delivery services. The Convey’s 2018 Last-Mile Delivery report shows exactly the same where many shoppers were surveyed and the results were as following:

  • Around 98% of the participants said that delivery has a huge impact on their brand loyalty.

  • 74% said that they prioritize delivery on the top when it comes to the online shopping experience.

Top 4 challenges associated with parcel delivery businesses

Several parcel delivery companies face a plethora of problems in their daily services. If not eliminated or mitigated, these problems can increase the overall cost of services and time consumption which can ultimately result in poor customer experience. Let’s have a closer look at these challenges one by one.

Uncertainty and lack of coordination

The uncertainty about the delivery status of the package is quite evident in many parcel delivery companies. It’s mainly because most of the traditional delivery companies use books or files to maintain their records. This outdated way of keeping records causes confusion and also results in poor coordination of deliveries. This manual system also results in weak audit trails.

Parcel delivery companies must come up with a system where they can notify the customers about the status of their parcels. Otherwise, there will always be an uncertainty among the customers which can make customers lose trust in your services.

Tracking delivery agent

Since traditional parcel delivery companies don’t have an efficient software for tracking, they find it really difficult to monitor all their delivery agents’ tasks. Tracking in absence of a solution becomes next to impossible as there are multiple variables involved such as identifying delivery points, traffic jams, waiting time for collections, parking, vehicle breakdowns, etc.

Escalating overheads

The direct and indirect overheads associated with the deliveries and collections of documents are quite enormous. These costs include salaries of delivery agents, direct transport costs of vehicles used for deliveries, insurance, fuel, taxis, repairs, postage costs, and many more. Without a robust solution in place, you won’t be able to keep a tab or track of these various costs and due to which it may result in escalating overheads.

Untimely deliveries

Untimely deliveries are a nightmare for parcel delivery companies. There are many factors which contribute to late deliveries like inadequate technology, high volume of shipments, lack of visibility, lost packages, heavy traffic, and many more. However, with an absence of a parcel delivery software, companies don’t have any means to overcome the above mentioned factors.

These are some of the major problems that all the parcel delivery businesses are facing. But there’s good news for them. They can overcome all these challenges by getting an on-demand parcel delivery solution. A robust parcel delivery solution with advanced features can automate and streamline the parcel delivery operations thus making them more efficient than ever.

Apart from that it can also enable businesses to offer rich parcel delivery experience to their customers by offering them with features like real-time tracking of their parcel. The biggest benefit of an on-demand parcel delivery solution is that it helps the businesses to keep a tab at their overhead costs and also allows them to minimize the costs considerably.

Different types of business models for parcel delivery

If you have decided to develop an on-demand parcel delivery solution then it’s very important to first decide on the business model. You must choose a business model which fulfills your vision and objectives. There are a few options from which you can choose. Below are those options which we have discussed in detail.

Package tracking aggregators

As the name suggests, in this type of parcel delivery solution, the application simply collects all the data from the packages to a single place. This means that you only need one app for tracking all your packages seamlessly. Furthermore, you can also add the packages manually by simply using their ID in the application.

Once added, the application will keep you posted with timely notifications of its delivery status. Parcel and Deliveries are some of the good examples of this type of package tracking aggregator apps.

Postal and parcel service apps

The most prominent postal and parcel services are leveraging the benefits of the mobile app for quite a long time. FedEx and DPD parcel delivery apps are some of the major examples in this category.

FedEx also has a separate app for its same-day delivery services. Whereas, the DPD parcel delivery offers a complete customer admin panel which enables admin to create shipments along with printing out the labels for your packages.

Integrated solutions and branded delivery apps

There are many retailers who decide to add order tracking features on their mobile application. However, there are few apps which provide holistic delivery information. Mostly, it only shows the status of the order of its processed, shipped, or when it will be delivered.

This one of the major reasons as to why many retailers utilize branded package delivery apps to gain a competitive advantage. These apps help them to offer top-notch convenience and transparency to their customers. However, it’s also important to understand that it doesn’t make any practical sense for the small retailers to come up with custom mobile apps for deliveries.

This is what makes third-party solutions like Deliv and Doorman so significant. They can seamlessly integrate with your business whether it’s a stock management system, website, or an app to provide you with the top-notch parcel tracking capabilities.

Uber-like marketplace app for parcel delivery

Currently, there are a myriad of Uber-like apps which are incessantly disrupting the traditional business way of doing business across several industry verticals. Out of these industry verticals parcel delivery is arguably the most popular niche in the on-demand businesses.

There are many startups such as Instacart and GrubHub which focus on grocery delivery and food delivery. You can also leverage their business model to come up with your own Uber-like marketplace app for parcel delivery.

Top 8 must have features for your parcel delivery solution

If you want to develop a successful on-demand parcel delivery solution then you must ensure that you integrate all the must have features in it. Here we have listed few of the most important features which you must add in your parcel delivery system.

Instant messaging

This is a must-have feature for your on-demand parcel delivery solution. This feature enables the admin to establish a seamless and uninterrupted communication with their customers. Here the admin can resolve all his customer’s grievances and queries and enhance the overall customer satisfaction.

Instant messaging feature also helps the delivery agent to communicate with the customers. With chat messages, both the parties can eliminate possibilities of misunderstandings.

For example, many times customers are not present at their home when the parcel reaches which wastes a lot of time and energy. With instant messaging, both customers and delivery agents can be on the same page by informing each other about last minute changes.

Packaging options

Packaging is one of the most important aspects of parcel delivery. No customer wants their package to get damaged while shipping. That’s the reason why you must offer your customers with multiple packaging options. These special packaging options can save packages from getting damaged during the shipping process.

You can also keep additional and chargeable service for certain packaging options for your users. These charges may depend on the material and the size of the packaging.

Proof of delivery

Delivery agents click the pictures of the item along with signatures of sender and receiver to eliminate any scam activities. Proof of delivery is a very essential feature that you must include in your on-demand parcel delivery solution. In this the delivery agent clicks the picture of the item while collecting the package from the sender.

This picture serves as a proof of delivery and it can be seen by the receiver as well. When the delivery agent delivers the package to the receiver he again clicks the picture as a proof of delivery. This feature eliminates any possibilities of scam or theft.

Real-time tracking

You can’t have a successful parcel delivery solution without a real-time tracking feature. This feature can be a game changer for your business. You can integrate real-time tracking in all three admin, delivery agent, and customer apps.

In the customer app, the users can track their package in real-time. Users can also get to know about the estimated time of arrival of their package. This helps in increasing customer satisfaction among your users.

Admins can also leverage this feature to track all his delivery agents. Moreover, he can also inform his delivery agent in case of heavy traffic on his route due to accident, rain, or construction work.

Real-time tracking feature comes as a boon for delivery agents as they get accurate routes and suggestions which help them to reach the destination as fast as possible.

Push notification

Push notification is another important feature which you must include. You can use this feature for multiple things. For example, you can provide live updates and real-time delivery status of the delivery package to your users. You can also use push notifications to send vital information such as ETA, change in time of delivery, driver’s information, etc.

Push notifications are also an effective tool to engage your customers and to improve the transparency of your business model. You can also leverage push notifications to offer various schemes or personalized offers.

Payment Gateway

Like other on-demand services, you must integrate payment gateways in your on-demand parcel delivery solution. Payment Gateway integration enables your customers to make payments via multiple options. For example, they can make payments via mobile wallets, card, or by cash on delivery. Adding more payment options offers convenience to your customers which ultimately helps you to attract more customers.

Reports and analytics

This feature is very crucial for the admin as it provides him with vital reports that consists of all the crucial data such as total orders placed, delivery agent commissions, profits, and other critical data in a graphical manner. These reports and analytics help the owners to take insight-driven business decisions.

Review and ratings

This feature enables customers to give their feedback based on their experience of using the service. Customers can give their feedback by both giving ratings and writing reviews. These feedback are highly valuable as the admin can implement these suggestions from the users to make his parcel delivery services even better.


In today’s time, on-demand parcel delivery solutions have become an inevitable part of the parcel delivery business. All the successful parcel delivery companies are leveraging the on-demand parcel delivery solution to gain a competitive edge among their rivals.

If you also want to do the same then get Yelowsoft’s robust and advanced parcel delivery solution that comes with all cutting-edge features. This ready-made solution can skyrocket your profits by increasing your parcel booking significantly. So, what are you waiting for? Just contact Yelowsoft to get your on-demand parcel delivery solution now.


Mushahid Khatri

Mushahid Khatri is the Chief Executive Officer of Yelowsoft, one of the leading taxi dispatch and on-demand delivery solution providers. He is a visionary leader who believes in imparting his profound knowledge that is leaned on business and entrepreneurship.

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