"Can't We just Build this In-House?": The Hidden Costs of Building Your Own Delivery Technology

When leadership teams consider expanding the technology powering delivery, there are a few options available. 

For enterprises with a robust development team, building in-house technology might seem like a logical choice. After all, who knows your business better than your own team?

Others might look to the market and piece together various software platforms that unlock the features they need. With the market size of last-mile delivery tech hitting 160 billion in 2024, there are more than enough platforms to choose from.

While both approaches can work, with the "DIY" approach, you'll likely be dealing with escalating maintenance costs and resource drain over time as your team struggles to keep pace with industry innovations.

Delivery technology must handle everything from rate shopping to real-time tracking, from fleet optimization to customer communications. And what's worse, by the time you build it, the market will have moved on.

Let's break down why building your own delivery technology might be the most expensive "money-saving" decision you'll ever make.

The never-ending development cycle

There was a time when curbside pickup was cutting-edge. Same goes for same day, in-store pickup, and more. Even next day delivery was considered the pinnacle of last-mile at one point.

Now, customers expect all of the above plus real-time tracking, flexible delivery windows, and seamless communication across every touchpoint.

Building these features isn't a one-and-done project. It's a permanent commitment to playing catch-up with customer expectations. And that new point solution is now your tech team's new full-time job. 

The complexities of designing and maintaining a delivery orchestration platform require a whole team to do it. We know, we have one of them ourselves.

Here's what they're working on in any given sprint:

• Continuous security updates and compliance maintenance
• Integration management with multiple delivery providers
• Real-time tracking system maintenance
• Customer communication platform updates
• Performance optimization and scaling

And that's just to maintain the status quo. We like to consider our product and development team as sort of a mission control center that touches every aspect of our customers' operations.

When leadership teams praise our hands-on support during a business review, they understand that retail delivery at scale today requires both daily operational excellence and long-term strategic evolution.

This brings us to another major pitfall to building in-house.

The innovation gap

Remember Target's groundbreaking curbside pickup system? When it launched in 2017, it was heralded as a huge retail innovation.

Today, well, that's a different story. Similar functionality comes standard with off-the-shelf solutions.

The pace of innovation in delivery technology is relentless and yesterday's innovation quickly gives way to table stakes.

What was groundbreaking 18 months ago—like basic geofencing for curbside pickup—has evolved into sophisticated location-based automation with predictive arrival times and automated staff notifications.

Basic delivery tracking has transformed into real-time updates with dynamic rerouting and automated customer communications.

Your custom-build system might work perfectly today, but what about next year? Or the year after?

The challenges facing development teams are multi-layered:

Provider integration complexity

• Multiple delivery services, each with unique APIs
• Annual maintenance, upgrades, and legal time spent with DSP contracts
• New services entering the market regularly

Shifting customer expectations

• Communication preferences evolve rapidly
• Demand for new fulfillment options (lockers, autonomous delivery, etc.)
• Increasing expectations for speed and convenience

Technical debt

• Systems begin depreciating from day one
• Each new feature multiplies maintenance complexity
• Development resources are split between maintenance and launching new features

The widening innovation gap that forms will get increasingly expensive—and risky to bridge.

The overall business impact

Let's translate these challenges into concrete business impacts.

When you commit to building in-house delivery technology, here's what you're really signing up for:

• Initial development costs (typically 6-12 months of a full development team)
• Ongoing maintenance (20-30% of initial investment annually)
• Regular security audits and updates
• Training costs for new team members
• Emergency fixes when systems fail
• Lost opportunity costs while building

From an investment perspective, the amount this costs will vary depending on the scope of your project. It's safe to say that even the upfront investment could enter into the millions of dollars range, along with significant annual recurring costs. That's not even mentioning the opportunity costs from losing ground against competitors.

On the other hand, you could find a delivery orchestration platform that already offers:

• Immediate implementation
• Continuous innovation cycles
• Proven reliability
• Connections to multiple DSPs
• Predictable costs
• The ability for you to focus on your core business

For a fraction of the cost of building in-house, you can leverage a solution that's already proven and constantly evolving to meet market demands. As Jenny from Lunds & Byerlys observed, "My team spends zero time worrying about delivery technology now. They're free to focus on what really matters: growing our business."

The choice between building and buying might seem complex, but when you consider the total cost of ownership, the answer becomes crystal clear.

The Bottom Line

Building your own delivery technology isn't just about the initial investment—it's about committing to a never-ending cycle of development, maintenance, and playing catch-up with market leaders.

The question isn't whether you can build it; it's whether you should. Your development resources are better spent on innovations that differentiate your business, not reinventing the delivery wheel.