How To Set Up a Local Delivery Service

Local delivery connects your retail business with nearby shoppers and gives customers a convenient way to receive purchases. They can order online or in-store. You then fulfill each order from a nearby store or distribution center.

IBISWorld values the US couriers and local delivery services industry at $241.3 billion in 2026, after 5.9% average annual growth between 2021 and 2026.

A reliable local delivery service needs systems to coordinate orders, plan routes, and track parcels. Ahead, learn how to set up local delivery and choose technology that keeps it profitable and dependable.

What is a local delivery service?

Local delivery means bringing an order from a nearby store or distribution center straight to a customer’s address. Customers can place an order online and then choose local delivery, carrier shipping, or in-store pickup.

Stores can handle deliveries in several ways. Some hire their own drivers, which gives them more control over delivery times and customer communication. Others use app-based courier services that provide drivers and routing tools. 

In a hybrid fulfillment model, the retailer handles regular deliveries, then uses third-party drivers during busy periods or outside the business’s delivery area.

Benefits of offering local delivery

Local delivery can increase sales and give nearby customers another reason to buy. It also gives retailers more control over order fulfillment and customer service.

Increase sales and average order value

Delivery speed affects checkout decisions. Baymard’s 2026 research found that 20% of shoppers who abandoned a purchase for checkout-related reasons cited slow delivery.

Retail teams can pick, pack, and deliver nearby orders directly from a store. Store owners can also offer free delivery once a cart reaches a minimum value. A $25 threshold gives customers a reason to add another item, raising average order value while helping cover delivery costs.

Shopify lets retailers create up to 10 local delivery zones per location. Each zone can have its own minimum order value and delivery price.

Build closer community relationships

Local delivery gives online customers a direct interaction with the business. The 2025 American Express Shop Small Impact Study found that 70% of US consumers feel they get to know their community better and play a role in its success when they shop at small businesses.

Delivery staff can reinforce that connection by providing clear updates and answering product questions at the door. A branded vehicle also keeps the business visible near the retail location.

Gain control over the customer experience

With in-house delivery, the retail team manages the delivery window, customer communication, and final handoff. Team members already know the products and the store’s service standards. This familiarity helps create a consistent experience through the final stage of the order.

Reduce reliance on third-party shipping carriers

Carrier rates and delays can make fulfillment costs and delivery times less predictable. Baymard found that 40% of shoppers who abandoned a purchase for checkout-related reasons cited high extra costs, including shipping, taxes, and fees.

Local delivery gives retailers more control over service areas and delivery fees. They can set rates that reflect distance and order value, then adjust capacity based on available staff and vehicles.

How to start a local delivery service

• Choose your local delivery model
• Define zones and delivery fees
• Set your delivery speed and schedule
• Equip your team with the right technology
• Establish a clear order preparation workflow
• Promote your local delivery service
• Offer complementary pickup and delivery options

1. Choose your delivery model

Your delivery model determines who handles orders and how much control you have over each handoff. Retailers with physical stores can dispatch orders from one or more locations. Online-only businesses can use a distribution center or fulfillment warehouse.

Before choosing a model, check whether each location has enough staff to prepare orders and make deliveries during store hours. The main options are to use an in-house team, work with a third-party fulfillment service, or combine both.

In compact service areas, staff can deliver by bike or on foot. Cars or vans suit longer routes. When comparing costs, include mileage, maintenance, and insurance.

Perishable orders, for example, need short, predictable delivery windows. The USDA recommends a maximum of two hours at room temperature. An in-house team can prioritize nearby orders, while a hybrid model adds drivers when demand rises.

2. Define your delivery zones and fees

First, decide which orders you can deliver at a profit. Shopify lets you create up to 10 delivery zones per location using a radius, ZIP, or postal codes.

A radius works when travel times are similar in every direction. Use ZIP or postal codes when distance alone gives an incomplete picture. An address five miles away can still take 30 minutes to reach because of traffic or a bridge crossing. Creating a separate zone for that area lets you charge a different delivery fee.

Once the zones are set, calculate the delivery cost for each order. Add monthly expenses such as vehicle insurance and delivery software. Then account for driver time, fuel, packaging, and third-party fees.

Insurance can change the calculation considerably. Insureon reports an average commercial auto insurance cost of $245 per month among their small business customers. Annual premiums in their data range from under $375 to more than $16,000.

Divide the monthly expenses by the number of deliveries you expect to complete. Then add the costs attached to each order:

Delivery cost per order = (monthly delivery expenses ÷ expected deliveries) + per-order costs

Run this calculation for each zone. Longer routes may require a higher fee or a larger minimum order value:

• Minimum order value. Offer free delivery when the margin on the order covers the delivery cost.
• Flat fee. Charge one price when delivery costs remain similar throughout the zone.
• Zone-based fee. Set a higher price for areas that require more driver time or fuel.

Use the calculation to find the lowest fee that keeps each zone viable. Baymard found that 40% of US shoppers who abandoned a purchase for checkout-related reasons cited high extra costs, including shipping, taxes, or fees.

After launch, replace the estimates with actual delivery volume, driver time, and fuel costs. Update the zones and fees when the cost per order changes.

3. Set your delivery schedule and speed

Choose a delivery promise your team can meet consistently. Stores can offer shipping speeds such as same-day delivery, next-day delivery, and delivery within two or three-day delivery.

Same-day delivery is a growing service category. Grand View Research projects the global market will reach $29.8 billion by 2030. Yet many customers will accept a longer window.

McKinsey found that 90% of US consumers are willing to wait at least two or three days, especially when the wait helps them avoid shipping costs. Respondents also ranked on-time delivery above access to same-day service.

Reserve same-day delivery for compact zones or time-sensitive products when staffing allows. Next-day or two- to three-day service gives the team more time to group orders into routes and keep delivery costs manageable.

Define three parts of the schedule:

• Delivery days. Choose days when staff or delivery partners are available.
• Order cutoff. State when an order moves to the next delivery run.
• Arrival window. Give customers a time range the team can meet.

Align the schedule to activity in the store. If weekends bring the most foot traffic, schedule local deliveries from Monday through Friday. Tell customers before payment that orders placed on Saturday will arrive Monday.

Publish delivery days and cutoff times on the website and at checkout. Repeat the fulfillment window in the order confirmation and send another update when the order leaves for delivery.

4. Equip your team with the right technology

Local delivery software keeps orders organized and moving on schedule. It gives your team one place to see what’s ready, assign drivers, plan routes and update customers.

Choose retail technology that assists with the four parts of local delivery:

• Manage orders at the POS. Shopify POS Pro lets staff manage online local delivery orders from the POS device. They can filter orders, view delivery instructions, print delivery slips, and update the status to “Ready for delivery” or “Delivered.” This feature is available at locations with a POS Pro subscription.
• Keep inventory current. An inventory management system updates stock at the store or warehouse that fulfills the order. Staff can confirm item availability before preparing the delivery.
• Plan routes and assign drivers. Delivery management apps group stops and send routes to drivers. EasyRoutes, for example, creates optimized routes, dispatches drivers, and tracks orders. An app like LionWheel has one-click route planning and lets customers choose delivery or pickup times at checkout.
• Update customers. Tracking apps can send notifications when an order is received, prepared, out for delivery, and delivered. Delivery instructions collected at checkout tell the driver where to leave the package or when to contact the customer.

Connect these tools so each status change reaches the next step. Shopify Flow can automate retail fulfillment and inventory tasks. It can also trigger actions in connected apps, reducing the updates staff enter manually.

5. Establish a clear order fulfillment workflow

A consistent order fulfillment workflow helps your team prepare each order correctly, hand it to the right driver, and get it to the customer on time. 

Use these five steps to build the process:

1. Assign roles. Define who’s responsible for order picking, packing, and delivering each order. Depending on the size of your operation and complexity of each task, some people may perform multiple functions.
2. Create a designated fulfillment area. Usually, this is in your stockroom or inventory storage area.
3. Use or create a packing slip template. Use printed or digital checklists to confirm all items (including customizations) are correct and packaged before they’re sent out for local delivery. 
4. Label orders clearly. Add the customer’s name, address, delivery method (in-house or third-party), and any special instructions to help the delivery person complete the delivery to the customer’s specifications. 
5. Mark the order as fulfilled. Once an order is ready for local delivery, update the status in your Shopify Order tab to “Fulfilled.” 

6. Promote your local delivery service

Design promotions on your website and retail signage in-store to promote your local delivery service. For example, you might use a pop-up or banner on your retail site, or a marquee to share information with customers in-store. 

For example, Edinburgh-based Fudi Bakery promotes free local delivery on orders over £15 in their homepage announcement bar. Shoppers see the offer and spending threshold as soon as they arrive at the ecommerce store.

In-store associates can also tell customers about the service if they’re interested in a product that’s too big to carry home the same day. They can consider other circumstances in which delivery would be a helpful option to offer, such as if the customer is going somewhere other than home after shopping and might not want to carry large or perishable items with them. 

There are other ways to promote your local delivery options online, including: 

• Social media. Post about local delivery on your social media channels, and supplement that with paid ads targeting the geographical area where you’re offering the service. 
• Email marketing. Segment your customer list by location, and email customers in your delivery area about the new local delivery option. Consider incentivizing them with a discount code or free delivery for their first order. 
• Search engine marketing. Chances are, potential customers in your area are searching phrases like “local delivery near me.” Optimize for local SEO for high placement in Google search results. 
• Retargeted ads. Send campaigns to past and current customers, as well as site visitors who did not yet make a purchase. Let them know that local delivery is now available and encourage them to try it out.
• Shipping policies and checkout pages. Run free-shipping campaigns or flash sales and combine them with messaging about local delivery to drive awareness and conversions. 

There are also traditional tactics that don’t require local digital marketing. Post flyers in community hot spots and consider collaborating with other local businesses to spread the word about your local delivery service. 

7. Offer complementary pickup and delivery options

Make local delivery part of your shipping strategy to give customers more ways to receive their orders. A mix of pickup and flexible delivery options can accommodate nearby shoppers, customers outside the delivery zone, and periods when order volume exceeds your team’s capacity.

Consider options such as:

• Local carriers. Use carrier shipping services for customers outside your local delivery zone or when your team reaches their delivery limit.
• Curbside pickup. Add curbside pickup for nearby customers who want to collect their orders quickly. Stores can also turn a warehouse into a pickup location, open a temporary in-store pickup location, or partner with a local business that has available space.

For example, White Rock Soap Gallery offers local delivery to seven ZIP codes near their Lake Highlands store, plus curbside pickup at the same location. The retailer also ships throughout the US, giving customers pickup and delivery options based on where they live and how they want to receive an order.

Setting up local delivery on Shopify

Giving customers the choice of how and when to receive their orders removes barriers to completing a purchase, which in turn boosts your bottom line. It also gives you a chance to connect with your community, driving customer satisfaction and loyalty. 

Shopify takes the stress out of local delivery by giving you one central business “brain” to manage retail operations. Customers can switch between sales channels and delivery methods within a single purchase, without requiring the technical infrastructure that inflates fulfillment costs and slows operations.

Regardless of what delivery method your customer chooses, with Shopify you have the confidence of knowing that all of your customers and order data updates accurately and in real time. More data leads to more actionable insights, and more opportunities to deliver even better results.