Small towns outnumber large cities by hundreds in every country. At the same time, large players are primarily interested in million-plus cities. This opens up an opportunity to create your own network business in small towns. But having your own network of small outlets scattered across towns can be quite a hassle. However, a business like this can be established using a completely different approach.
Project Essence
Omnicart is developing a local delivery infrastructure for restaurants and online stores in small towns under the slogan “Your excellent service, our excellent technology.”
The point is that Omnicart does not create its own extensive delivery service. The startup has developed a technological platform that entrepreneurs from small towns can use to create their own marketplaces, where you can select, order, pay for, and deliver goods from various suppliers.
In one of the interviews, the startup co-founder called it “Shopify for marketplaces with local delivery.”
On the Omnicart platform, it’s easy to create and configure various types of services – from niche B2B marketplaces to B2C marketplaces like Doordash.
The most popular categories of goods sold on these marketplaces are ready-made food from restaurants and cafes, products from local farms and stores, and cannabis, which has become popular after its legalization in the USA and Canada.
Omnicart offers free business and technology consulting services to entrepreneurs who decide to create a local marketplace in their city.
Their platform has already created marketplaces operating in 30 cities in the USA, Canada, and Puerto Rico. The startup’s immediate plans include ensuring its presence in 20 U.S. states and all Canadian provinces. At the same time, the founders say they are already considering opportunities to enter the Asian and Latin American markets.
To accelerate the coverage of new territories, Omnicart has raised new investments of 1 million Canadian dollars (about 690 thousand U.S. dollars), increasing the total investment in the project to 2 million Canadian dollars.
What’s Interesting
Omnicart has decided to build its marketing on an ideological basis. It states that “partnering with us is partnering with the local community,” supporting local businesses, local producers, local workers, and all that. Building a local marketplace, according to the startup, is like “neighbor helping neighbor, friend helping friend.”
The startup claims that when buying from local sellers, 68 out of 100 dollars spent remain in the local economy, while only 43 out of 100 dollars spent by the buyer remain in the local economy when buying from federal players.
It should be noted that federal players, as a rule, are not so eager to enter small towns – because it brings them a much lower return on investment than expansion within megacities. Therefore, they usually decide to do this only at the moment when the potential for expansion in megacities begins to be exhausted.
For example, Uber Eats only began entering small towns in Canada this October, where Omnicart is originally from.
Such a delay in the expansion of federal players gives local entrepreneurs the opportunity to start building their similar local marketplaces much earlier, trying to gather more loyal sellers and buyers who can retain their market share even after the arrival of a federal player in the region. This is not a 100% guarantee, but there is a chance.
In this regard, small towns are an interesting topic for business. No, building a separate business in a small town is not interesting. It is interesting to create “hyperlocal” businesses – which represents a collection of similar businesses, launched and developed according to the same recipe in many small towns.
Interest in the topic of small towns can be fueled by the fact that most cities in most countries are just small.
If we take, for example, the USA, then there are only 10 cities with a population of 1 million people, 27 – with a population of 500 thousand to 1 million, and 52 – with a population of 250 to 500 thousand.
But with a population of 100 to 250 thousand – there are already 225, from 50 to 100 thousand – 466, from 25 to 50 thousand – 741, from 10 to 25 thousand – 1,572, and less than 10 thousand – even 16,410.
A similar situation with the distribution of the number of cities by population is observed almost everywhere. The picture shows very similar graphs of the decrease in the number of cities with an increase in population in Brazil, China, Europe, the CIS, India, South Africa, and the USA.
Where to Run
Thus, an interesting direction of movement is the creation of hyperlocal businesses in small towns.
However, creating your own businesses in each such city is undoubtedly a huge hassle and large expenses for ensuring ubiquitous presence, considering that each city will not bring that much money.
In this sense, the approach demonstrated by today’s Omnicart is interesting. It only creates a single technological platform, the development of which would not be affordable for any local entrepreneur – but which independent local entrepreneurs can use to create their own businesses.
These entrepreneurs are already in the right places, and therefore they are able to successfully control the local businesses they create without extra costs. At the same time, they will work hard to create a successful business on a local scale – that is, a small business. But many small streams of deductions for a subscription to the platform and commissions from sales can merge into a more full-flowing river flowing into the pocket of the hyperlocal player who started all this.
Therefore, an important question arises – what other types of hyperlocal businesses involving local entrepreneurs can be undertaken based on a single technological platform? What ideas are there besides repeating today’s Omnicart?