With more and more people wanting to have food delivered to their door, it is almost essential for restaurants to offer delivery to keep up with the times. However, from having a variety of third-party delivery services to choose from to implement an in-house system, countless questions and decisions are facing every restaurant in this process.
Should your restaurant use a delivery service? For quick, straightforward, and reliable delivery, third-party delivery services are an easy choice. However, third-party delivery services often take between a 25 and 35% cut, leaving restaurants with little profit. Choosing a delivery service will get your food in front of more people, increasing brand recognition. However, creating an in-house delivery system will leave you with more profit.
Making this critical decision for your restaurant should not be taken lightly. We will walk through the pros, cons, and other things to consider when deciding upon and choosing a delivery service or keeping it in-house.
What Will a Delivery Service Provide?
Delivery services like UberEats, GrubHub, and DoorDash allow consumers to scroll through their app and choose from a plethora of restaurants. In a few simple clicks, customers see your name, scroll your menu, and place their order to be delivered by a driver. By outsourcing your delivery service to a third-party, you allow them to worry about delivery, car insurance, reliable drivers, and taking payments.
For many companies, outsourcing can drastically lessen the stress of trying to keep safe delivery drivers on duty. Touch Bistro reports that 80% of full-service restaurants use a delivery service. Also, the extra resources needed for taking these orders are funneled through the app, making it effortless to get your name and brand out there without bumping up advertising. This all may seem like a natural choice, but delivery services take quite a cut of the profits.
With many restaurants working in a narrow margin, often between 15 and 25%, the cut of third-party delivery services can be drastic. However, most delivery orders tend to be around 20% larger than in-restaurant orders. Most consumers do this because if they’re already paying the delivery fee, they might as well load up on food.
Here are the overall pros of getting a third-party delivery service:
- Name recognition: More customers will see your restaurant as they scroll through their app.
- Simple delivery: By merely signing up and uploading your menu and a few other things, you can provide hassle-free delivery without having to do too much work on your end.
- New customers: Many potential customers cannot come into restaurants for a variety of reasons. By offering delivery, you are gaining more clientele. With this, you may lower your overhead if more customers choose delivery instead of in-house dining.
With all these upsides, though, come a few downsides:
- High Third-Party Fees: Most delivery services take 25 to 35% of the check total, leaving you with minimal profits.
- Loss of Control of Customer Experience: Many restaurants take pride in their customer service, and for a good reason. By outsourcing your delivery, you will no longer be the one taking orders and delivering them. One lousy driver could leave a bad taste in the mouth of your clients without you even knowing.
What is the Best Delivery Service?
If you’re ready to make the dive into a delivery service, the best for you will significantly depend on where you are. Overall, DoorDash controls nearly 40% of all delivery orders, with GrubHub at 31% and UberEats estimated somewhere in the mid-twenties. However, these numbers vary greatly depending on what part of the country you are in.
In New York City and Boston, GrubHub is the most utilized delivery service. But, in Texas, San Francisco, and Washington DC, DoorDash tramples the competition. In Miami, UberEats dominates the market, but, in Los Angeles, Postmates delivers 37% of orders. So, choosing the right delivery service for you depends on what is most prevalent in your area.
However, you do not have to pick just one. Most customers will use different delivery services depending on what discounts and promos are being offered. So, feel free to play the services against each other to get the best fees and customers.
Can You Do an In-House Delivery System?
It is no surprise that customers want their food as fast and hot as possible. Delivery services, though, are not motivated by restaurant-specific reputation. While many have some sort of driver rating system to make sure the drivers do their part to keep things rolling, this still does not always ensure a great customer experience.
If you have the means, time, and energy to implement an in-house delivery system, we highly recommend it. This way, you get to keep all the profits. Similarly, you can have control over the food from the kitchen to the front door. However, this does require quite a bit of work to pull off.
Here are some of the demands of an in-house delivery system:
- Increased Staff and Resources for Customers to Order: Customers either will call in or order online. It would help if you created an easy to order system for your deliveries to be successful. If you are not tech-savvy, this may be difficult.
- Safe Drivers and Vehicles: Finding reliable drivers with dependable vehicles and excellent customer service skills can be hard to do. The legal considerations of someone using their car for work can add a bit of work to this area.
Some restaurants have signed up with delivery services for a while to get their name out there and have customers become delivery regulars. However, after they can perfect their delivery service, they leave the third-party apps and only do it through their own app or website. With this approach, the third-party delivery services can be a great stepping stone to grow your business.
Other Things to Consider When Doing Delivery
There are a few final things to note when doing a delivery. If you have not done utilized delivery at your restaurant before, consider the following:
- Your to-go containers will have to be spill-proof. This may mean upgrading your packing to ensure solid food presentation and heat retention.
- Offering delivery will increase overall sales, but it will also mean more work for the kitchen and cooks. So, make sure you have an extra staff person ready to hop in if more hands are needed.
- Stress may occur among your staff with the growing volume. So, make sure you are around to help ease tensions and deal with inevitable mishaps is essential.
- On top of increased staff and new packaging, you may need more space. If you are already running in tight quarters, having 20 to 40 or more orders a night may take up quite a bit of space. If you are waiting on drivers to come to pick up the food, the order should be sitting somewhere warm and be easy to read.
All in All, Delivery Will Expand Your Horizons
Choosing to deliver is an excellent step in widening your customer base. There are quite a few things to consider whether you go with a third-party delivery service or keep it in-house. If you are ready to take on the challenge of developing your own, you can keep the control and the profit of the whole system. But, for easy and straightforward delivery, a third-party service is the simple option.