The verdict in three sentences
In Lagos, the last mile costs roughly NGN 1,200 to 4,000 per drop depending on the zone and operator, and frequently accounts for 40 to 55 % of logistics cost. An in-house fleet becomes profitable above about 25 to 30 deliveries a day; below that, on-demand platforms (Kwik, Gokada) and independent couriers stay cheaper. The real lever is not the sticker price but the failed-delivery rate, which can erase your whole margin once it passes 15 %.
Three delivery models in Lagos
Each model has a different break-even point. These are 2026 order-of-magnitude figures for a standard intra-city order.
| Option | Cost per drop | Intra-city timing | Reliability | Break-even |
|---|---|---|---|---|
| In-house rider (bike) | NGN 800-1,500 amortised | 2-6 h | High (85-95 %) | > 25-30 drops/day |
| Platform (Kwik, Gokada) | NGN 2,000-4,000 | 1-4 h | Medium-high | Irregular volume |
| Independent courier | NGN 1,200-2,500 | 3-24 h | Variable (70-90 %) | Small volume, known zones |
| Inter-area transporter (GIGL) | NGN 2,500-5,000 | 24-48 h | Medium | Outlying zones |
In-house riders pay off when volume is stable: an amortised bike, a salary of NGN 90,000 to 140,000/month and fuel spread across many drops.
Hard zones and failure rates
Not all areas are equal. Dense Island districts move fast; the mainland outskirts and gridlocked corridors stretch timing and raise failures.
| Zone | Average timing | Surcharge | Typical failure rate |
|---|---|---|---|
| Victoria Island / Ikoyi | 1-3 h | 0 | 5-8 % |
| Yaba / Surulere | 2-4 h | +NGN 700 | 8-12 % |
| Ikeja / Maryland | 3-6 h | +NGN 1,000 | 12-18 % |
| Ajah / Lekki far end | 4-8 h | +NGN 1,500 | 15-22 % |
| Outskirts (Ikorodu, Epe) | 24-48 h | +NGN 2,000-3,500 | 18-25 % |
A 20 % failure rate means one drop in five comes back: you pay two trips and lock up the goods. Watch this metric first.
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Mini case study
Ibrahim runs a cosmetics store in Lekki and delivers 35 orders a day, average basket NGN 18,000. On a platform at NGN 3,000 a drop, he pays NGN 105,000/day in delivery. Bringing it in-house with two riders (2 x NGN 120,000/month + fuel + bike amortisation ≈ NGN 340,000/month, about NGN 13,000/day over 26 days), his cost per drop falls to roughly NGN 370. Savings: over NGN 2.6m/month, provided volume holds. Below 25 drops a day, the platform won again.
FAQ
Should I charge the customer for delivery or absorb it? In Lagos, a fee shown between NGN 1,500 and 3,000 is accepted if it is transparent at cart. Offering free delivery above a threshold (say NGN 25,000) lifts the average basket by 10 to 20 %.
How long to build an in-house fleet? Budget 2 to 4 weeks to hire, equip and run in two riders. Break-even usually sits above 25-30 stable daily drops.
How do I cut the failure rate? A pre-delivery call, a confirmed time slot and a GPS pin shared on WhatsApp drop failures from 18-20 % to under 10 %, a direct saving on repeated trips.
Are platforms like GIGL reliable for e-commerce? Yes, for absorbing peaks and zones you do not cover, but their per-drop cost (NGN 2,000-5,000) eats margin on small baskets. Many stores go hybrid: in-house on dense zones, platform for overflow.
What tool runs all this? An order dashboard with delivery status, rider assignment and proof of delivery lets you track timing and failures by zone, and rebalance in-house versus outsourced every week.
Let's talk about your project. We build a multi-zone delivery module with tracking and rider assignment straight into your store. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
