A wide majority of businesses in the hospitality/catering sector have decided to split their operation between eat-ins and deliveries. With the first food delivery dating back to 1889, food delivery itself has become increasingly popular over time. The first recorded instance of a hot food delivery stems from Italy when King Umberto and Queen Margherita gave in to laziness, so they called upon Raffaele Esposito to have a pizza delivered to them at their palace in Naples. The invention of cars was merely in it’s beginning stages at the time, so food would be delivered in a horse-drawn cart. 

 

Today, in the 21st century, it’s hard to think of a restaurant or takeaway you can’t get food delivered from. In-house delivery has become a great option for restaurants looking to build a loyal customer base. Even if they don’t deliver themselves, you can easily have someone bring it to you through the use of third party delivery apps. It works both ways, more reach for the business, more convenience for the customer. This is all well and good but it leaves most restaurant owners with the question: “Should they offer in-house delivery or use third-party providers?”

 

In this blog we have decided to weigh up the two options and help you to decide which delivery model is better for you and your business. Even though restaurants and eat-ins are gradually opening back up, this blog can still serve as a guide for those who are looking to maximise their profit off deliveries or looking to switch their model.

 

 

Using An In-House Delivery Service

 

Offering customers an in-house delivery service can be a very attractive proposal to some restaurant owners. The idea of having more control over the different factors of a delivery is what makes it seem so attractive and they’re not wrong. Speed, service and quality are all important factors when it comes to deliveries in general, not just food. If restaurant owners are able to control the process of how their food is delivered, they can build on their customer loyalty, in turn demonstrating how reliable their delivery service is. 

 

A lot of customers prefer to cut out the middleman, directly ordering from the restaurant itself. If you handle a large volume of orders, then you also have to be able to handle the pressure that comes with your own delivery service – not to mention the costs of staff and vehicle maintenance. To add to that, you also bear the responsibility of customer service standards and must ensure that things don’t slip during busy periods.

 

Advantages:

 

  • The ability to max out your profit margins
  • Are able to control the experience customers have
  • Maintain customer data in order to build on loyalty and relationships
  • Cut out any middleman in your business operation
  • Customers don’t have to pay extra service charges from third-party providers

 

Disadvantages:

 

  • Have to keep up with the cost of having your own delivery service
  • Constant maintenance and fuel charges of vehicles
  • Be able to manage your drivers and set the standard for delivery
  • Can be fairly overwhelming during peak times
  • You’re held responsible for any issues or mistakes upon delivery of food

 

Most Suitable For:

 

  • Smaller restaurants wishing to make their customer experience more personable
  • Local restaurants with a loyal customer base in the area 
  • Takeaways that want control over the customer interaction
  • Owners that want to keep all the profit made from online orders

 

 

Using Third-Party Providers

 

With third-party providers, restaurants are able to set themselves up immediately and get their entire menu delivered to customers, all with no little to no upfront investment. It also takes the problem out of the restaurant’s hands and becomes the drivers responsibility to get the food safely to the customer. If the customer is not happy with how they received their food, then the third-party company is responsible for the complaints and refunds.

 

Although there is a lot of competition on third-party apps where you can get lost in a sea of restaurants, there is still tons of free exposure and marketing you can gain from just being on there. This all sounds too good to be true – what do these third-party companies gain out of this? A 20-30% split of your profits on every order made through their app or website. In the end, you have to come to a decision – and that is whether the trade-off between great exposure or loss of margin is worth it.

 

Advantages:

 

  • The ability to max out your profit margins
  • Are able to control the experience customers have
  • Maintain customer data in order to build on loyalty and relationships
  • Cut out any middleman in your business operation
  • Customers don’t have to pay extra service charges from third-party providers

 

Disadvantages:

 

  • Can get lost in a lot of competition on the different platforms available
  • Relying on such platforms to deliver to your standards can be quite risky
  • Things can become really busy and complex with orders coming in from different platforms
  • Loss of contact and quality control after food has been sent out
  • They take a 20-30% share of your profits on an order through their platform

 

Most Suitable For:

 

  • Bigger restaurant/eat-in chains or franchises bringing in a hefty volume of orders and revenue
  • Fast food outlets unable to dedicate time and money to their own delivery service
  • Takeaways that are able to reach a lot of homes in the area
  • Restaurants with a high enough margin to take on the 20-30% split in profits

 

 

The Impact Of Covid-19

 

Covid-19 has had a huge impact on the world with two metre gap signs, empty supermarket shelves and several lockdowns being put in place. It was a tough time for everyone and continues to somewhat affect our daily lives. Restaurants, takeaways and eat-ins have also been deeply affected. With the government forcing businesses in the hospitality industry to close down, many had to switch over to a contact-free delivery operation.

 

Thankfully, restrictions are starting to ease and the public should be able to enjoy eating in their favorite spots again – adhering to social distancing of course. However, it wasn’t too long ago that the former had taken place more than once. In fact the UK has had three lockdowns in total so far. So you should definitely take into consideration the possibility of another lockdown. It would be wise to incorporate at least one of these delivery models if you’re opening a new restaurant and have yet to do so.