2 Ways Restaurant Delivery Can Cost You Less

Europe’s current rough economic waters mean more businesses are looking to tighten their belts. So how can small restaurants and chains continue to serve and attract a broader range of customers while keeping costs low?

Delivery has become integral to a restaurant’s business, but partnering with food aggregators and marketplaces can prove costly. Often, commission rates can range from 20-30%—and when you tack on a refund policy you have no control over, you could be spending even more by the end of the year.

To increase profits while keeping delivery costs down, here are two options small food businesses should consider.

1. The Third-Party Logistics Provider

The lesser known of the food delivery options, a third-party logistics (3PL) partner can actually be the key to maintaining a marketplace presence without the heavy commission. Generally, food logistics partners are associated with supply chain management, like refrigerated trucks that deliver to grocery stores. But there’s an area that 3PL partners like Stuart can help restaurants: On-demand delivery of hot and packaged meals. This can be done for your in-house orders (from your website, app, or even phone-ins) as well as the deliveries you receive from food aggregator platforms. 

How Does It Save You Money?

There are two things restaurants should know:

• Managing an in-house delivery fleet is time and energy consuming.
• Using food marketplaces has a significant commission attached to it. 

3PLs cover this cross section, taking fleet management off your plate while reducing your marketplace commissions from 30% down to roughly 12%. As logistics experts, they also have the ability to pool or batch your incoming in-house and marketplace orders, which is a more profitable, productive, and efficient way to deliver to your customers. 

How? Pooling orders means that you pay the delivery fee* once on several orders. 

This win-win situation is a quick way to boost your bottom line with a long-lasting impact on your restaurant delivery. This business model also provides you with more control over how much delivery fee you charge to your end customer, either taking it all on yourself, splitting it between you and the end customer, or passing the fee entirely onto them.

*Extra drop-offs have an additional lower fee.

2. The “Own Channel” Solution

An “own channel” or branded food delivery channel may seem like an avenue for multinational businesses like McDonald’s or Burger King. But with new, user-friendly technology, there’s greater possibility for small-to-medium-sized businesses to tap into this market.

A direct-to-consumer (D2C) delivery channel means cutting out the middleman—aka food aggregators—and providing online orders and delivery directly through your website or branded app. There are several ways to build a D2C channel: building it in-house, contracting website and app developers, or partnering with SaaS platforms like Flipdish, that specialise in online ordering and management. These tech solutions differ from website and app developers due to their restaurant expertise and the extra niche bonuses they offer, such as marketing or delivery partner and POS (point-of-sale) API integrations.

How Can SaaS Providers Aid Small Restaurants & Chains?

Flipdish is an “end-to-end ordering, marketing and management” system that partners with smaller food businesses to power their brand and business and increase revenue. They accomplish this by taking care of all the technical aspects of:

• Building a branded website or integrating an online ordering system directly into your existing one,
• Creating easy-to-use branded mobile apps for iOS and Android,
• Integrating “Order Online” buttons directly into Google and Instagram,
• Building your customer database,
• Designing targeted marketing campaigns to increase orders and reach, and
• Implementing a delivery solution—either together with your own delivery team or with food delivery service partners, such as Stuart.

It’s a full-service digital ordering platform that restaurants with little digital infrastructure or technical expertise can use to take their business to the next level. By partnering with them, you can limit the risk of several cons we listed: the set-up time, a lesser initial investment, and the technical expertise.

5 Reasons Why Small Food Businesses Should Consider Own Channel

1. Reduce or eliminate commission fees: You can reduce the commission fee from 20-30% down to 5-10%—or get rid of them altogether, depending on the model you choose.
   
   
2. Gain access to customer data: By understanding your customer base—what they like, how often they order, etc.—you can cater directly to them and foster better long-term relationships.
   
   
3. Build smarter marketing campaigns: With that same data, you can tailor your campaigns to highlight relevant promotions and offers.
   
   
4. Control the customer experience: By owning the full experience, from ordering to delivery, you can ensure a more seamless experience and remain in touch with customers at all times, allowing you to keep them updated.
   
   
5. Update everything in real-time: Run out of a menu item in the middle of service? When you own your online ordering and delivery system, you can make changes any time as often as you need.

No matter which solution you choose—Stuart is here for you. Get in touch with our team today to find out how we can help your restaurant save on delivery.