Should Your Restaurant Have Its Own Food Delivery Service Or Use A Third-Party Delivery?

Should Your Restaurant Have Its Own Food Delivery Service Or Use A Third-Party Delivery?

Restaurant delivery is changing the way the food service industry operates. There was a time when only selected restaurants or pizza parlors made deliveries to their customers. Times have definitely changed and food delivery is becoming the new standard. Establishments that have not started offering a restaurant delivery service, it’s time they realized every restaurant should offer a delivery service or they could easily fall by the wayside.

The bottom line, if you have a restaurant, whether large or small, sooner or later you will have to offer a food delivery service.

Before You Start…

There are several aspects that should be taken into consideration before starting a food delivery service.

Some Questions You Should Ask Yourself:

  • Will you have to hire more staff and drivers?
  • Does your restaurant offer online orders?
  • Will you provide the food service directly from your restaurant or outsource it to a third-party?

Keep in mind, there is no right or wrong answer as every restaurant has its own unique needs but you should consider all the pros and cons in order to find the best choice for you and your business.

Third-party food delivery service

Why Using A Third-Party Delivery Service Could Benefit Your Restaurant

Get New Customers

Using a third-party to deliver your food is giving you great exposure to new customers. A third-party service already has loyal customers but this will extend far beyond established customers to those who are visiting from out of town who will call for delivery because they are not sure where you are located. Many new customers will use various apps from third-parties to filter down to their food categories. A third-party will bring your restaurant to many new customers who otherwise would not know anything about you. Imagine a loyal customer who broke his leg, skiing, and discovers you will have his order delivered to his door! I call him a friend for life!

Increase Your Restaurant’s Profits

Whether you will have your own delivery service or hire a third-party, you will increase your profits. The added benefit of using a third-party delivery is their already well-formed customer service base. These services will give you excellent exposure to people who have never known about your establishment, bringing new customers to your door. Also, consider the number of customers who will come to your establishment to place an order vs ordering online. You should look into finding an automated solution such as KDS that can offer dual streams of traffic.

Decrease Labor & Driving Costs

Keep in mind, when you hire a third-party delivery service, they have drivers to make the deliveries. This will take the burden off your kitchen staff so they can spend their time preparing the food, not delivering it. Also, if you decide to make your own deliveries you must consider the additional costs that will come into play. You will have to hire drivers, deal with liability situations associated with driving, and get insurance. A third-party service has all these aspects already in place.

Why Using A Third-Party Delivery Service Could Have Its Downside

The Cost

If you hire a third-party delivery service, they will take a certain percentage of each delivery you make. Even though a third-party service will bring your restaurant recognition, it comes with a price tag which could be as high as 30% of the sale. You should weigh the costs for having your own delivery service against hiring a third-party and then decide which will work best for you.

Your Lack Of Control Over Deliveries

Remember, if you hire a third-party delivery service, you have no control over the actual delivery. Once the food leaves your restaurant you have no way of knowing what happens to the order. Keep in mind, these drivers do not work for you and if they give a really bad service, the customers are not going to know they do not work for you and will probably take it out on you. You could start getting a bad reputation and people will stop ordering from you!

Less Brand Recognition

Even though third-parties offer excellent user interface through apps, it’s their brand that is getting all the recognition. Therefore, if branding is very important to you, this might not be the best avenue for you.

Food delivery guy

The Upside To Having Your Own Delivery Service

Studies have shown that restaurants that have their own delivery service will be approximately 50% less expensive to operate. If you have the staff and resources, you will earn more revenue and keep entire profits from deliveries. While you will not have the hidden costs that come with a third-party, keep in mind, staffing and other expenses will be on you.

Some studies have shown that customers would actually prefer to order directly from a restaurant than with a third-party. When you take care of all aspects of running your restaurant your customers will get the added benefits of convenience and provided more dining options. Also, your brand will be right there and up front, for your customers to continually see.

You Are In Control

With your own delivery service, everyone on your team answers to you. You head the delivery process and the level of customer service is in your hands. You make the decisions how the delivery service should operate but you will see more financial benefits.

The Downside To Having Your Own Delivery Service

Keep in mind, with operating your own delivery service, you are the one who is liable for anything that happens. You have all the costs, have to directly deal with angry customers, and will have to burn the midnight oils to change things that are not running as planned. Your restaurant should be in a position to handle issues and circumstances so you will increase your profits.

Staffing & Startup Costs

You will be responsible for hiring drivers and getting the needed vehicles for delivery. The vehicles have to be fueled and they must have proper auto insurance. Your drivers have to be paid and you must make all the decisions for making sure your delivery service is a huge success.

If having your own delivery service is important to you but you feel the costs are just too steep, don’t give up! Use a third-party service for a short while so you get the feel of it and develop your own delivery service plan. You will then know when it’s the right time to start your own delivery service.

Pizza delivery dog
photo credit: PINKE / Flickr

Takeaway

All restaurants are different so what’s right for one might not be right for another. A good food delivery service is on the rise and you must keep up with the demands of your customers. Go over all the Pros and Cons that we have provided and then decide which delivery option will work best for you.

If you are looking to start a delivery service, you should strongly consider investing in a kitchen display system that can help your restaurant in streamlining the flow of orders. With real-time order tracking, customers will have access to real-time information while your staff can deal with the flow of orders both in-house and deliveries.

Related Post

What is Mechanical Engineering?

What is Mechanical Engineering?

The word “engineering” comes from the Latin word ingeniare, which Merriam-Webster defines as “the design and manufacture of complex products.”…

The business world should not be boring. Agreed?

If you say “Absolutely!” please sign up to receive weekly updates from the extraordinary world of business, hand-picked from the web just for you.