Free home delivery…

Perverts may kindly quit reading the post, its not for them 🙂 . I am here to talk about the businesses that revolve around these three magic words. It might be pretty obvious to most of us as to why this concept has become the talk about the town but the question that cuts like a knife is that why someone will deliver stuffs to you for free ? Lets make an attempt to find out plausible reasons.

Feasibility of a business depends largely on answer to the question : Will it sell ? In this case the answer is a big YES. The reason could be anything, time crunch, lethargy or simply because it has word FREE attached to it 🙂 . As the saying goes there is no free lunch on earth, the Pizza which “Pizza Hut” delivered might not be smoking!!! The other flip side could be that one will have to serve for oneself, I simply hate that.

OK, I have strong reasons to avail the service but what makes McDonald’s and likes to offer it. The obvious reason could be reaching out to those 3 times in a month who would have dropped in probably once in a blue moon. This certainly increases the revenue but what about profit margin, has it gone done down substantially ? I seriously doubt!! In fact I think its the other way round. Albeit it sounds counter-intuitive but it makes sense once you start calculating the rent of the space that you use, air-conditioned environment, salary of waiter, cost of maintenance blah blah.. Mind you the service provider simply kills aforementioned costs when he delivers it to your home.

The bottom line is that with same infrastructure (or with little extra) one serves more number of customers and hence generates more revenue.

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