Not Everything Should be On-Demand
In recent years, on-demand has seen a particular spike in interest. Both from a consumer and business perspective, this interest has made headwinds with promoters proclaiming that on-demand is one of the ways in which people can reclaim more hours of their day. On-demand comes at a cost however — a cost that can make the model unattainable for many industries.
This high cost of creating an on-demand business often centers around the high cost of delivering goods and services.
If one wants to provide item or service X, on-demand, there needs to be some method for delivering it. Many companies will utilize drivers. Drivers cost money. Money can be saved by reducing the number of drivers at different times during the day, but demand can be pretty variable. This can create another problem with demand.
A spike in demand, unanticipated, can result in higher service quality issues. More personnel to meet demand spikes can burn through budgets.
What’s a business to do?
In addition to the fact that some items are not needed on-demand (like potted plants or dog houses), on-demand often works best with industries and products that have higher margins. Higher margins, allow variable costs to be more easily absorbed.
On-demand doesn’t necessarily mean the end for businesses that don’t fit these categorizations. Rinse has found a way to make dry cleaning clothes (talk about an antiquated service industry) ridiculously easy, for instance. If applied correctly and smartly, technology can be created to provide a scalable, cheap, and effective way to get more people the products they want, when they need it.
What on-demand services do you use to save time and make life easier?
Originally published at www.kevinhamano.com.