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The Delivery Dilemma: 3rd Party Services vs. In-House
With full-service dining still limited in many places, delivery has become an increasingly important element of the dining world. Delivery allows restaurants to offer the food they’re proud of to customers in the comfort of their home, while also helping keep their business and staff afloat. However, with the influx of 3rd party delivery systems that have recently come to dominate the market, business owners face challenging decisions regarding whether or not to use outside services, or to stick with their own in-house delivery.
Every restaurant and business has different needs, and there is some variation between different 3rd party services, but across the board there are a few distinct pros and cons to using 3rd party delivery systems. Here’s what you should keep in mind:
Using 3rd Party Services
Companies such as GrubHub, Seamless, UberEats, and DoorDash are just a few big names on the delivery service market. As these companies have risen in popularity, they’ve designed efficient technology that makes ordering delivery quick and easy for consumers. Since these companies are entirely dedicated to pick-ups and deliveries, they’re able to dedicate time, resources, and technology towards making the process workable and scalable. These services are great for:
Attracting and Keeping Customers
When customers order delivery from a 3rd party, they’re often able to see all of their options on one convenient app or website. This means new customers might discover your business as they explore choices in the area based on filters that can sort options by cuisine type, delivery range, or even menu item. Many 3rd parties offer coupons and discount codes, which can be a draw for customers both old and new. Restaurants that are on multiple platforms are also essentially casting a wider net, meaning they can capture the business as many users as possible.
Streamlining Labor Costs
Third party delivery services will pick up the order at the store and deliver it to the customer. This can decrease labor costs for businesses, since the restaurant won’t have to staff its own drivers or couriers. These services can also streamline labor costs because they eliminate a step in the delivery process, meaning less employees will be needed to answer phones, track online orders, etc.
Downsides of 3rd Party Services
The Bottom Line
The 3rd party delivery system model relies on charging restaurants for using their services, which often comes with a hefty price tag. Pricing structures vary across different platforms, but most take commission as well as charging delivery fees. Restaurant owners know how thin profit margins can be, so these added costs can significantly impact the business’s bottom line.
Utilizing a 3rd party also runs the increased risk of fraud and product waste, because if a customer cancels the order through the third party, and the kitchen has already made the food, the loss still falls on your business.
Lack of Quality Control
Using a service to take care of everything from the customer placing the order to receiving the food leaves a lot of room for error that is beyond the restaurant’s control. If a customer has a bad experience due to a 3rd party service, you might be at risk for losing their business. Since 3rd parties work with so many businesses, they have a lot less at stake in terms of representing your brand and reputation to its fullest potential.
What About In-House?
Relying on in-house deliveries brings about its own sets of challenges as well as benefits. Using your own staff to handle deliveries means avoiding the fees associated with 3rd party services. However, the increased cost of labor that will be required in order to have your own staff handling delivery should be kept in mind. Though hiring dedicated delivery staff does come at a price, you’ll also be on your way to building a strong team of loyal staff, which is essential for any business.
In-house delivery allows restaurants to be more involved in the delivery process, since they know who is handling the food at every step in the process. Taking orders in-house reduces the risk of communication errors, and therefore cancellations and product loss. Handling deliveries in-house means you’ll have greater control over the product your customer receives, which is a major part of keeping customers happy and continuing to order from your business.
Figuring out how to make your delivery operations run smoothly —and cost effectively— is a challenge for any restaurant. Luckily, there are a variety of tools available to help make the process easier. From 3rd party services that bear the brunt of the delivery burden, to technology that makes in-house delivery increasingly easy for both franchises and smaller restaurants, delivery can be a great way to expand, adapt, and evolve your business.
Adora’s POS is compatible with whichever route makes the most sense for your restaurant. If you decide to handle deliveries in-house, our integrated delivery management system offers features like customizable delivery zones, a driver tracking app, and Google map integration. Our intuitive driver dispatch screen helps your delivery staff stay organized, meaning your customers will get their food faster. A state-of-the-art online ordering platform allows customers to get exactly what they want, without creating logistical issues on the business end.
If you decide to go with a 3rd party service, Adora can still help make the process more streamlined and seamless. We’ll help you get orders to drivers or couriers quicker with a kitchen display system that automatically prioritizes orders. Deciding how to handle deliveries is a big decision, and Adora is here to support whichever choice you make.