In the age of convenience, online ordering systems, self-service kiosks and mobile platforms have become key to delivering what customers want most: a fast, personalized and convenient meal experience.
As the number of digital orders grows, restaurants should explore their options for takeout, delivery and other off-premises ordering methods. You must consider different options including SaaS vs In-house vs Third-Party, to implement in your operations.
But should your restaurant set up its delivery service or use one or more third-party food delivery platforms such as Uber Eats, DoorDash and others? Let’s compare your options.
In-house delivery: Explained
Restaurants account for 78% of US delivery orders, while only 22% of orders are placed through SaaS-based for on-demand delivery. This means that if your restaurant is to set up its delivery operation, you can potentially reach a large audience of customers who want to order directly from your restaurant.
Advantages of in-house delivery
Your restaurant may regain control of the entire delivery experience by not outsourcing the delivery. Today, it is important to create the best customer experience for re-ordering, so keeping the delivery process in-house can be a wise decision. You will be able to train your delivery staff, but you will also be able to choose your business model and product offering.
Choose a SaaS-based solution that eliminates communication barriers that come with third-party delivery. You’ll be able to connect with your customer throughout the order, making it easier to receive feedback and implement changes where needed. Don’t forget that personal communication style can also positively impact the customer experience, resulting in business repeat.
Long run profit
While setting up your distribution operation requires a serious investment, not paying a commission charge can be worthwhile in the long run if your profit margin is high.
Accessible to more customers
Restaurants often adjust prices online to include online food ordering marketplace fees, sometimes preventing customers from ordering. With this large percentage of default paid to outside parties, restaurants may offer lower prices online, making delivery more accessible to (potential) customers.
Easy to update menus
If you run your entire delivery function, updating your online offers will be much easier. A common issue when working with third-party delivery companies is that prices and menu items may take some time to adjust, as the delivery platform first approves such a change.
Cons of in-house delivery
Starting an online food ordering needs huge funds and expertise. You need to invest a fleet of delivery vehicles (or pay for the couriers you are dealing with for your use), choose a reliable payment system, ensure your drivers, learn how to track delivery and food. Think about how to store and transport, sound and durable packaging,
Hurdle in decision making process
Your ability to grow your business depends on the amount of capital you have, and not making the best decisions due to your lack of experience can cost you more than just money.
Undertaking of responsibility
Running your own delivery home is about responsibility. You can’t put a burden on a third-party delivery company whenever something goes wrong. While delivery platforms can relatively easily offer vouchers for false, cold or erratic orders, restaurants need to ask themselves how they handle bad delivery experiences.
Although the number of orders through restaurant apps or websites is high, not signing up with a delivery partner can lead to low visibility and potential customers. Your existing customers can place orders directly from your app, but how do you increase your reach?
Marketing in-house delivery may require more investment than joining a third-party platform, which will bring you a whole new pool of customers.
When it is best to use an in-house delivery team?
Suppose you sell perishable goods and want to offer delivery to your customers without paying 20. In that case, 30% of sales demand delivery services, creating an in-house delivery team may be the right choice.
To develop a food delivery app team is cost-effective, gives you more quality control over how items are delivered and allows you to be flexible (handling both on-demand delivery and same-day / next-day delivery).
Also, having your driver means that your customers are still depending on your business. They depend on your business on your online food ordering app and when they interact with your app through your drivers.
If a customer has a complaint, they’re talking to someone who knows more about your products than a third-party delivery driver.
Third-party food delivery: Explained
To develop a food ordering app for your new business, as each platform has its loyal users and target audience, some of which you may not reach yourself. This increased searchability may be particularly favourable for small-scale businesses and start-ups.
Plus, you can work with as many delivery partners as possible to expand your reach significantly.
Advantages of third-party food delivery
Experience and resources
Third-party applications offer vast experience and resources, and skills not yet available in your restaurant. Connecting with an outside party means that you can easily grow your business based on your partner’s experience and following their approach, which is already well established and tested.
Focus on core business
Outsourcing delivery lets you focus on your core business: preparing delicious food and creating an unforgettable customer experience. While there are many benefits to offering in-house delivery, it can distract from your final product – which, ultimately, your customers will remember.
Partnering with an online ordering platform is certainly not free, but it allows you to avoid investing on various fronts. In return for the commission charge, you’ll be able to take advantage of a ready-made infrastructure, including a network of couriers. And riders, packaging materials, delivery tracking, secure payment methods and more.
Cons of third-party delivery
Third-party delivery companies are often known to charge hefty commission fees. Depending on the business you run and your margins, these charges may not be possible. And even considering the infrastructure and experience you receive in return.
Fear of losing control
Many restaurants’ owners fear losing control of the delivery experience. There is nothing to tell your business about the training of delivery staff. Or how your food is delivered to your customer.
In case of a poor delivery experience, your business may be affected even if you are not responsible for it. And 80% of customers say that they will blame the restaurant, not the delivery service, an important consideration if anything goes wrong.
Hiring an outsourced delivery service can cause you to lose communication with your end customer. Maintaining positive brand awareness and delivering the customer experience you want becomes more difficult. And as you have no direct line of communication with your diner.
When to use a third-party delivery service
There are two main types of third-party delivery services: on-demand delivery and same-day/next-day delivery.
Delivery services on demand
On-demand delivery services are extremely popular for ordering food at your doorstep. Many customers already have an on-demand app on their phone, usually from one of the major players.
Customers can log in to the app and scroll through the list of nearby businesses offering delivery. One great advantage of this arrangement is that it gives local restaurants more exposure, helping them reach new customers.
Same day delivery
The next day courier services are primarily located to help companies that do not sell perishable goods. They work best for retail outlets or pharmacies. They are also the most budget-friendly option as there are various features ranging from courier to courier. Whether they provide route monitoring, proof of delivery or shipping tracking for your customers.
Also, due to non-demand delivery, these courier companies can increase their operations and reduce their cost, which saves you money.
There are advantages and disadvantages to both third-party and in-house delivery. Before you create a restaurant food ordering app, make sure you balance the options to determine which type of delivery is most appropriate for your business.