The verdict in three sentences
The last mile is the heaviest and most visible cost in your chain: it's where margin and customer satisfaction are won or lost. In Lagos as in Abidjan, the real challenge is not raw speed but reliability against informal addressing and failed drops. Done well, it costs you 1,500 to 4,000 NGN per drop; done badly, it wipes out 15% of your sales in undelivered parcels.
What a delivery really costs in Lagos
Cost depends on zone, mode and volume. Here is a 2026 order of magnitude for a store delivering across metro Lagos.
| Delivery mode | Cost per drop (NGN) | Average time | Failure rate |
|---|---|---|---|
| In-house dispatch rider | 1,200 - 2,000 | 2 - 4 h | 8% |
| On-demand rider (Kwik, GIGL) | 2,000 - 3,500 | 3 - 6 h | 12% |
| Logistics aggregator | 3,000 - 4,000 | 24 - 48 h | 10% |
| Pickup point | 700 - 1,500 | Next day | 4% |
| Express (< 2 h) | 4,000 - 6,000 | 1 - 2 h | 6% |
Pickup points remain the cheapest and most reliable, but they shift the burden to the customer. An in-house rider becomes profitable from 12 to 15 deliveries per day in a single zone.
In-house vs outsourced: the real math
This is not ideological, it's arithmetic. An in-house fleet carries fixed costs; outsourcing carries variable costs.
| Criterion | In-house fleet | Outsourced |
|---|---|---|
| Monthly fixed cost | 400,000 - 650,000 NGN | 0 |
| Cost per delivery | 1,000 - 1,800 NGN | 2,000 - 4,000 NGN |
| Break-even | ~ 250 drops/month | — |
| Quality control | High | Medium |
| Peak flexibility | Low | High |
| COD handling | Direct | Remitted in 3-7 days |
Below 250 deliveries per month, outsourcing wins. Above that, a partial in-house fleet on your dense zones slashes the unit cost.
Informal addressing: the real bottleneck
In Lagos, few streets are numbered and landmarks ("beside the pharmacy at the junction") replace addresses. What works in 2026: capture a GPS pin at checkout, require an active WhatsApp number, and call the customer 15 minutes before arrival. These three habits cut the failure rate from 12% to under 5%.
Mini case study
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Ada, who runs a cosmetics store in Lekki, processes 300 orders a month, average basket 18,000 NGN. Outsourcing at 3,000 NGN per drop with a 12% failure rate, she loses 36 returned parcels (round-trip cost plus tied-up stock), roughly 190,000 NGN/month in losses. Switching to an in-house rider at 1,500 NGN with GPS capture and a pre-call, her failure drops to 5%: she saves 450,000 NGN on drop cost and recovers 21 parcels. Estimated net gain: over 600,000 NGN per month.
FAQ
How much should I charge the customer for delivery?
Between 1,500 and 3,500 NGN by zone, or free above a basket threshold (often 25,000-30,000 NGN). Charging below your real cost destroys margin; offering it smartly lifts average basket by 15-20%.
When should I build my own rider fleet?
From 250 to 300 monthly deliveries concentrated in a few zones. Below that, fixed costs (salaries, bikes, fuel) aren't absorbed and outsourcing stays cheaper.
How do I cut the delivery failure rate?
Capture a GPS pin at checkout, confirm the WhatsApp number and call 15 minutes ahead. These three moves take failure from 12% down to under 5% in practice.
Is cash on delivery (COD) risky?
Yes: it increases returns and ties up cash flow. Encouraging prepayment via mobile money cuts COD failures by 30-40% and secures collection.
Do I need a written delivery SLA with my carrier?
Yes: set a maximum time, tolerated damage rate and COD remittance window. A clear SLA (e.g. delivery within 48 h, COD remitted within 3 days) protects your cash flow and reputation.
Let's talk about your project. We build your store with delivery tracking and mobile money payment integrated. 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.
