Description
What is the 5BM Delivery Pricing Model?
The 5 Bob Manufacturing Delivery Pricing Model is an Excel-based transport costing and profitability tool designed to help manufacturers and SMEs understand the real cost of moving goods.
It can be used for raw-material collection, supplier transport, customer deliveries and other business errands. The model helps a manufacturer determine whether delivery is genuinely profitable instead of unknowingly absorbing logistics costs into the business.
What does the model calculate?
The model considers variables including distance travelled, vehicle type, fuel type, fuel consumption, fuel price and other transport-related costs to establish cost per trip and cost per kilometre. It also enables comparison between different delivery methods.
Which delivery modes can be evaluated?
The model includes common transport options such as motorcycle, tuk-tuk, pickup, lorry and truck. This allows a business to evaluate which vehicle is economically appropriate for a particular delivery.
Who should use this model?
Manufacturers, wholesalers, distributors, suppliers, retailers and SMEs that regularly transport raw materials or deliver products to customers can use the model.
Frequently Asked Questions
How do I calculate delivery cost per kilometre?
Calculate the costs associated with operating the vehicle or purchasing the transport service and relate those costs to the kilometres travelled and carrying capacity.
Should manufacturers charge customers separately for delivery?
That depends on the company’s pricing strategy. The important thing is knowing the actual delivery cost before deciding whether to charge it separately, incorporate it into product pricing or absorb it.
Should I use a tuk-tuk, motorcycle or pickup?
The answer depends on distance, load, vehicle capacity and cost. The model enables these options to be compared numerically.
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