Third-Party Delivery: Navigating Integration, Potential, and Service Fees

    It starts with setting clear goals.

    A restaurant employee carrying a brown paper bag of food.
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    Ask yourself what it is you want your delivery service to do for your business

    In 2018, customers ordered $10.2 billion in food from delivery services, outpacing the revenues of all but four major restaurant chains. Then in 2020, the coronavirus pandemic initiated mass shutdowns and kept millions of people at home, where food delivery was one of their only options for acquiring restaurant grub. Survival for many businesses has meant the adoption of third-party delivery aggregates like Uber Eats, Doordash, and Grubhub.

    But some restaurants are still struggling to navigate these services. The challenges of adoption can come in the form of struggling with the technical aspects of the integration alongside the fees associated with third-party delivery. However, with the right steps, any restaurant can make the most of the new world of delivery expectations and still accrue profits.

    The process starts with setting clear goals for your restaurant and requires constant assessment throughout to determine if the delivery system you’ve adopted works for your business. With these simple steps, you can better navigate the challenges of adopting a food delivery service for your restaurant, helping you keep afloat in the modern world.

    1. Determine your goals

    For any business venture, you should start by setting realistic and clear goals. For a delivery service to function well for your restaurant, it needs to fulfill broad enough needs while not costing too much in fees. Additionally, it can provide visibility and customer insights that may be difficult to acquire without such a platform.

    Ask yourself what it is you want your delivery service to do for your business. There are three major features delivery services provide that play into restaurant profitability, and one or more of these may stand out as the primary goal for your business moving forward:

    • Increasing visibility
    • Forging new customer relationships
    • Generating valuable customer data

     

    You want to define an approach to delivery that will scale your business in all of these directions, providing more information for marketing your restaurant in the future. Delivery can mean more than just maintaining profits in a quarantined world; it can help you build a broader customer base for consistent growth.

    2. Examine your options

    Every third-party food delivery service is different. They charge different fees, have different policies, and interact with levels of variance across platforms. However, the idea is basically the same. You can offset the cost of maintaining vehicles, hiring and managing employees, and paying for driver insurance through the utilization of these platforms.

    But be aware of all the costs and potentially hidden fees in the service you go with. Do your research. Delivery apps can be a friend or a foe, creating both benefits and challenges for many businesses and quick-serve restaurants.

    Here is a breakdown of the typical fees associated with the Uber Eats, DoorDash, and Grubhub:

    Uber Eats

    • 30 percent fee for delivery
    • 15 percent fee per pick-up order
    • Negotiated fees possible

     

    DoorDash

    • 25–30 percent fee for delivery
    • Potential halved fees for smaller businesses
    • Additional marketing fees optional

     

    Grubhub

    • 10 percent commission rate
    • Additional processing fee of 3.05 percent plus 30 cents
    • Additional marketing fees optional

     

    Each of these services offers additional benefits at additional costs, assisting businesses in marketing and customer outreach. In light of the pandemic, each has also committed to various forms of small business assistance, potentially enabling you to receive services with reduced fees.

    Before choosing a service, examine the policies and fine-print of each, ensuring that you are not surprised with hidden costs.

    3. Build a safe, simple system

    It is essential at all times—but especially during a pandemic to maintain a hygienic system for food transportation. Food delivery means that food and to-go boxes pass through a variety of hands. A procedure must be integrated within your delivery system to maintain correct handwashing procedures.

    For food preparers and servers, hygienic procedures should already be commonplace. To encourage additional hygiene for food delivery personnel, consider setting up handwashing and hand sanitizing stations in which the delivery driver can quickly clean their hands.

    4. Anticipate fees and maximize revenues

    Third-party delivery aggregates can be costly, cutting into small business revenues and damaging outcomes. That’s why an effective strategy for navigating these fees is essential for small restaurants or chains that cannot afford to integrate their own delivery service.

    Again, your first responsibility is to investigate your options for delivery services. You want to choose delivery methods that will help you maintain your revenues while increasing the breadth of your customer base.

    Next, be sure to maintain a clear avenue of communication with your customers. Third-party delivery services take ownership of much of the customer experience out of your hands. Correct this by maintaining a method of quick and accessible communication for customers to reach out to you. Providing direct lines of contact through phone, email, or social media can help you understand what may not be working and allow you to fix some issues as they arise.

    Finally, assess third-party delivery assistance applications like UberRUSH or Postmates On-Demand that offer delivery logistics to help you plot your own potential delivery service. Building a delivery experience into your business model can be complicated and costly, but third-party tools can help you manage it if you decide you want more control over the delivery experience.

    Through thorough research and constant communication, restaurants can offer delivery and still make money. However, it may take frequent assessment of your strategy to maximize your revenues to their fullest.

    5. Reassess your strategy

    Adopting a third-party delivery service for your restaurant may be vital in the current landscape. As people try to limit how much they leave their homes, the need for delivery is exploding beyond the anticipated trends of the pre-pandemic world. Businesses can thrive in the delivery economy with the right approach to third-party delivery, but it may take some time before you can fully integrate a process that builds your revenues.

    Set intervals for analysis and strategy reassessment, using the data you gather from customer communication to fuel how you proceed and better your delivery process. Third-party apps can be beneficial, despite the associated costs, but it will take innovation on your part. Brainstorm smoother processes, cheaper menu options, and more to maintain a competitive edge even in difficult times.

    Jori Hamilton is an experienced writer from the Northwestern U.S. She covers a wide range of topics and, because she spent over six years in the restaurant business before writing full-time, takes a particular interest in covering topics related to the food and beverage industry. To learn more about Jori, you can follow her on Twitter.