How to set up the delivery coverage area for a new delivery business: travel time, density and cost per km
The first order from an area you had not planned for usually comes quickly: someone from a neighborhood twenty minutes from the depot writes on WhatsApp and asks if you can bring it to them. Saying yes is the natural thing, because the business is just starting and every customer counts. The problem shows up with the third or fourth one, when you realize that trip cost more than the order was worth.
Defining your coverage area before accepting orders from anywhere is not putting a cap on growth. It is deciding where you are going to make money delivering.
Start with time, not kilometers
Straight-line distance is misleading. Two neighborhoods at the same distance from the depot can be ten minutes away or thirty, depending on a closed avenue, a railway crossing or a bridge. What matters is how long the vehicle takes, and that can be measured.
A simple way to do it: pick four or five points in different directions and at different distances, and drive the real trip at the time of day when you deliver, not on a Sunday morning. Write down the one-way minutes. That already gives you a more honest picture than any circle drawn on a map, and you will see that the real zone looks like a blotch, not a circumference.
Also set a time cap per order. For example, no one-way trip may take more than twenty minutes. It is a simple rule to remember and easy to explain to the driver.
Customer density decides how much the trip gets diluted
A long trip is not expensive or cheap on its own: it depends on how many deliveries share it. Driving to a neighborhood 8 kilometers away to drop off a single order is a bad deal. Going there to drop off six, one after another, spreads the cost of the round trip across all of them.
That is why the useful question is not "how far can I go?" but "how many customers are there, or could there be, in that area?". If you have a list of customers or inquiries, place them on a map and see where they cluster. Areas with few scattered customers are the ones that cost the most, even if they are close. Areas with many customers close together justify more distance.
This ties in with route order: the better you group by area, the more each kilometer yields. We covered it in how to order your delivery routes.
Cost per kilometer, with a hypothetical example
To put a number on the limit you need to know what each kilometer costs you, counting fuel, wear, tires, insurance and the driver's time. The full formula is in the real cost of a delivery operation; here we use it with made-up values to see how it works.
Say a cost of 500 per kilometer and an average order with a margin of 3,000. Three different situations:
| Situation | Round-trip km | Orders sharing the trip | Cost per order | What is left of the margin |
|---|---|---|---|---|
| Nearby neighborhood | 4 | 2 | 1,000 | 2,000 |
| Neighborhood 8 km away, with 6 orders on the run | 16 | 6 | 1,333 | 1,667 |
| Neighborhood 8 km away, with 1 order | 16 | 1 | 8,000 | minus 5,000 |
The same far-away neighborhood goes from reasonable to money-losing depending on how many orders get grouped. The conclusion is not "don't go far", it is "don't go far for just one". With those numbers, that zone can be served if you group it on a fixed day of the week, or require a minimum order, or charge an extra delivery fee.
How to draw the zone, step by step
A reasonable order for a delivery business that is starting out:
- Mark the depot on the map and the points where you already have customers or inquiries.
- Measure real travel times to different points, at the time of day when you deliver.
- Draw a first zone that covers the points where customers cluster and respects your time cap, without worrying about making it tidy.
- Review the edges: neighborhoods just outside may be worth it if they are right next to the zone and have customers. Neighborhoods inside the zone but isolated are better removed.
- Decide what happens with whatever falls outside: it is not served, it is served one day a week, or it is served with a surcharge or minimum order.
And one last decision, the one that gets postponed the most: what do you answer to someone who writes from outside the zone? It helps to have the reply written down, in a friendly tone and with an alternative if there is one, such as the day you pass by that area.
Expand the zone with criteria
Starting small has an underrated advantage: you learn the operation with few variables. With a limited zone you quickly see how long a delivery really takes, how many fall through and how much of the workday you have left over. Once the route fits comfortably, you expand in the direction where you already have customers waiting, not in all directions at once.
If you start delivering at several times of day, the zone also gets organized differently: each shift can cover one sector, as explained in how to organize delivery in multiple shifts.
The limit of controlling it by hand
When the operation is small, the zone lives in the owner's head or on a printed map. When orders come in through WhatsApp and are handled by someone who is not the owner, mistakes start: an address that was outside the zone gets accepted because nobody checked, and the driver finds out in the van.
If you take orders through WhatsApp, delivery software for distributors can take care of that check. In delivery mode, Sodapp lets you define delivery polygons per city and validates that each address is inside the service area, so you do not accept orders that cannot be delivered. Coverage zones are part of the delivery mode, not of the plan without drivers; the detail of each plan is on the pricing page. How orders are actually taken is covered on the WhatsApp orders page.
What the system does not decide is where you draw the border or what you do with whatever is left outside. That comes from the three numbers above, measured in your own operation.
About to start delivering and not sure where to cut the zone? Message us on WhatsApp and we will work it out together using your customers and your real numbers.
Frequently asked questions
How do you define the delivery radius for a new delivery business?
You define it with three pieces of data: how much travel time you are willing to spend per order, how many customers there are in each area and how much each kilometer costs you. The radius is not an ideal circle but the point where the cost of getting there is still lower than the order's margin. It is best to start small, close to the depot, and expand once volume justifies it.
Is it worth charging an extra delivery fee for farther zones?
Yes, it is a common option when a zone is only profitable with a surcharge or a higher minimum order. What matters is that the customer knows before confirming, not when the delivery arrives. Another alternative is to serve that zone only one day a week, so several orders get grouped into a single trip.
How often should you review the coverage area?
Review it whenever something big changes: you add a vehicle or a driver, fuel prices go up, a group of new customers shows up in a neighborhood you did not serve, or one area generates more failed deliveries than the rest. Without big changes, a review every three to six months using real numbers is enough.
Questions about applying this to your delivery route?
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