Optimizing Logistics and Delivery Costs in E-Commerce: Evidence From Small Businesses in Uzbekistan

For small online sellers, delivery is often the largest cost they can actually control. This paper builds a per-order cost model of last-mile delivery for a typical small e-commerce business in Tashkent and compares five arrangements: an in-house courier, an in-house courier with route planning and delivery time windows, a third-party courier service, marketplace pick-up points, and a hybrid of pick-up points and third-party delivery. The analysis covers monthly volumes from 200 to 750 orders. The results show that the choice of delivery model depends mainly on order volume. Below roughly 280–306 orders per month, outsourcing to a courier service is cheaper; above this threshold, an in-house courier becomes competitive, and with simple route planning its cost per order at 600 orders falls to about 12,400 UZS, less than half of the third-party tariff. Pick-up points give the lowest cost up to about 600 orders per month and a cost that does not depend on volume, but their use is limited by customer acceptance. Fewer failed deliveries accounted for about one-third of the savings from optimization. The paper concludes with practical recommendations for small sellers and for policy measures that could lower logistics costs across the sector.