Third-Party Delivery: Should Your Business Invest?

Restaurant patronage has been shifting in recent years with an increasing demand for delivery services. Currently, 25% of all off-premise orders are for delivery. Keeping up with this demand may mean jumping on the bandwagon. Implementing delivery means either establishing an in-house service or using a third party.  These third-party services are incredibly convenient, but there are pros and cons to consider. Some argue that restaurants shouldn’t do everything by themselves; use the services and focus on the business of making food. Others would say that restaurants can control their brand better if they run their own delivery services. And that may be true as research shows that customers who use third-party apps are more loyal to the provider and not the restaurant. Here are 5 things to consider about whether to use third-party delivery to help you decide if this new trend is right for your restaurant.

Weigh the Startup Expenses— If your restaurant is in a position to start its delivery service, you’ll need to invest in buying a fleet of vehicles, develop an app for the service, and put money aside to advertise your new product, among other costs. Establishing your own service is beneficial if you are doing higher volumes in sales as it becomes less expensive to operate delivery in-house. However, if your delivery sales are lower in volume, it makes sense to use a third-party delivery service. 

Reaching New Customers—Third-party delivery services can be beneficial to garner new customers. These services give consumers greater access to more food options. Your restaurant may exist outside of neighborhoods potential clients frequent, meaning it’s less likely your restaurant would get foot traffic from this demographic. Partnering with third-party delivery services means this population now has exposure to your menu, can order online for the first time, and be inspired to visit your restaurant.

Additional Marketing Opportunities—If your restaurant does not have a strong social media or advertising presence, going with a third-party delivery service can get your brand more exposure. However, if your restaurant uses Facebook, Instagram, and other social media to actively get the word out and can afford a few delivery vehicles, it may be more advantageous to start your own service. One primary reason for this is that consumers significantly prefer to order delivery from restaurant websites than to use third-party delivery apps. If you’ve got the resources to start your restaurant’s delivery service, then market this aggressively and you’ll see equal or greater returns over using an outside party to deliver.

Protect Food Quality—Third-party delivery services should understand the importance of food quality. However, when restaurants use their services, they have no control over whether their food remains intact during the ride or if food safety was practiced. If the client is disappointed when the food arrives, it’s incumbent on the restaurant to fix the problem. If your restaurant decides to use these services, it’s important to invest in the right packaging for the order. To guarantee food freshness, your restaurant could consider limiting the delivery distance. This may reduce some profits, but you’ll have greater control over your brand.

Limit Your Liabilities—No matter which direction you take, there are liabilities when it comes to running any food delivery service. Third-party services must consider a number of possible liabilities, including incidents that could happen between the driver and the client, which might reflect poorly on your product. If you choose to use third-party delivery, the Nation’s Restaurant News offers a list of ways to protect your restaurant from legal action. If you’re running your own operation, you must make sure you have appropriate insurance policies in place, have GPS for all vehicles, and guarantee your employees carry a food handler’s permit to avoid liabilities.

There are benefits and drawbacks to using either your own delivery service or contracting with a third-party one. If your operation is small and you’d like to increase the market for your food, third-party delivery services might be a great option for you. However, if your resources are significant and you prioritize marketing, there is no reason not to establish your own delivery service. Either way, you’re providing a delivery service that didn’t exist for your operation before and one more way to get your product out to a wider audience.  

About Restaurant Magic
Restaurant Magic Software has been providing advanced software solutions to the restaurant and hospitality industry for over 20 years. The robust Data Central Management Suite, the flagship product, is a powerful and flexible application that takes advantage of the latest technology trends to offer premier processing and analytics. With advanced forecasting, predictive scheduling and mobile technologies, Data Central has something for every problem. To learn more about Restaurant Magic Software and its products, call us at 1(800) 933-4711 or visit the website at RestaurantMagic.com.