Estimating the number of customers
Whether you are going to buy an existing milk round or start one up from scratch it is essential that you have enough customers to make your business viable.
An average milk round has around 475 customers according to DairyUK, and you will need to check out the area in which you are planning to operate to see if you are likely to be able to sell to this many customers on a regular basis.
Why will customers order their milk from you
The main challenge that the delivered milk sector faces is that supermarkets and other retail outlets have taken a large slice of the milk market away from roundsmen. People have become used to picking up milk with the rest of the shopping, and, of course, the supermarkets and their convenience store chains offer milk for sale at very low prices.
You will need to find enough customers who would welcome a home delivery service. These customers might be:
- the elderly
- young families who have difficulty in getting to the shops
- anyone who is housebound or who has mobility problems
Look closely at your local area to identify whether or not enough potential customers live there. Ideal places include new housing developments, sheltered housing complexes and blocks of flats.
Don't forget that some people might welcome having groceries delivered along with the milk - a recent survey showed that the average milk round sells more than one hundred different products. In fact Dairy Crest's Milk&more doorstep delivery service offers customers more than 250 products.
As well as delivering milk and other products to householders you might also have some trade, or wholesale customers. These are known as semi-retail customers and might include:
- corner shops, petrol filling stations and other retail outlets
- caravan and camp sites
- catering establishments
- hotels and guest houses
- nursing and residential homes
- play schools, schools, nurseries
Local businesses might also welcome a regular delivery for staff use, particularly if they are located on business or enterprise parks with few shops nearby. Why not offer a range of tea and coffee making products and perhaps some snacks like biscuits and cookies? Don't forget that many large employers have an on-site canteen that is likely to use milk and dairy products every day.
If you plan to target trade customers:
- count the number of suitable businesses in your area
- work out what products you will offer them
- work out how much discount you will offer them - 10% is common
- approach them to see if they would be interested - don't forget if they are already being supplied you will have to give them a good reason to change. This might be lower prices, a better service or a more attractive and wider range of products
Use the record sheets to note down the results of your market research.