How Delivery Apps Are Damaging Your Business and What You Should Do About It

If you run a restaurant and use a delivery service then you NEED to read this. 

Ask yourself the following questions:

Do you still only accept deliveries by phone?

Do you rely on a third-party delivery service like Grubhub or DoorDash?

If you answered yes to either of these questions, then you need to have a serious think about your current business model and whether it is really optimal. Keep reading and you’ll learn why it’s absolutely crucial to be able to take online orders – and why it’s so important that you manage this process in house.

If you implement these concepts, you could save yourself a HUGE amount of money every single month. 

And guess what? In a post COVID-19 world, this is more important than ever.

Why Online Ordering is Essential for the Catering Industry

If you’re in the catering industry and you currently don’t deliver to your customers, then you are missing out on HUGE opportunities. 

These days, not offering clientele the option to have your meals delivered straight to their door is pretty much like not having a website. Not only does it make you seem a little slow on the uptake: it means that you aren’t providing a service that they have come to expect as standard.

If a customer needs to drive to your door to get the food, then you have instantly ruled out a HUGE portion of your potential audience. Many people aren’t even able to leave the house to collect food, whether that’s because they have a sleeping baby upstairs, or whether it’s because they can’t drive.

What’s more, is that you need to make this process as simple and easy as possible. Customers now expect to be able to visit your website, input their preferences in a large and simple interface, and then wait for the food to show up at their door. 

If you don’t offer this service? Then they’re simply going to go somewhere else.

“But I make the best spaghetti in town!” you may protest!

That is not the point: when people are hungry and in a rush, they don’t want to take 10 minutes speaking to someone on the phone to get their food. That is especially true if it is a large order that they’re going to need to write down and then repeat multiple times.

And guess what? Those are the exact types of orders that you need to be encouraging! They’re the ones that earn the most money after all.

This is why companies like DoorDash and Grubhub are so popular among customers. These sites make it extremely easy to place orders with food companies. You can simply pass a phone around and then click “order” when you’re ready. It’s so simple that you can still do it after a few drinks! And it takes minutes.

This option has completely removed a big “barrier to sale.” You’ve made it possible for people to buy from you on an impulse. And this can send your orders through the roof.

Solutions like this have only become VASTLY more important in the wake of COVID-19. Think about it: home delivery is now the only way that a lot of people can even choose to eat your food! 

And even when things go back to normal, we will be left with a world that doesn’t want to go out: that has become accustomed to being able to get what they want to be delivered.

Not only that, but COVID-19 isn’t going to completely disappear overnight. Even when things go back to some semblance of normal, we will still be on the lookout for spikes in the infection that will necessitate social distancing protocols.

In other words: you can’t afford not to think about this right now. If you run a restaurant, then these services will be the only way that you can stay afloat.

But 3rd Party Delivery Services Are NOT the Answer

While this might sound great though, it’s still not the optimal solution for your business.

Not by a LONG shot.

Why?

Because obviously you’re going to lose out on a large number of your profits. That’s because you need to share those profits with the company that is acting as the broker. 

If you list your business on a site like DoorDash or Grubhub, then you agree to give away a massive portion of your sales. And this is understandable.

After all, Grubhub is not simply helping you find customers out of the good of its heart! Rather, this is a business that exists in order to make money. That means it needs to take a commission on your sales, which in turn means that you need to give away some of your profit. Except that it doesn’t work quite that simple!

OR charge more, which results in customers being less satisfied, which ultimately hurts your reputation.

What’s more, is that sites like Grubhub need to charge a high enough commission in order to make a profit while ALSO paying all of their drivers to handle the delivery. And they have other costs too: large marketing budgets (we’ve all seen the ads on TV) AND websites and apps to maintain.

But these apps and sites don’t actually charge the restaurants that commission directly. Instead, they add a fee for the consumer to pay. This means that the consumer is now spending more on the food and you aren’t seeing a dime of that! That’s on top of other costs that are incurred.

This is why someone buying food from DoorDash will often end up paying 30% more or higher than they would have done if they bought directly from the restaurant. We’ve already discussed how this can hurt your reputation: the food is not going to taste 30% better!

This includes:

• The service fee
• Taxes
• Delivery fee
• Gratuity

Interestingly, the precise figures here vary by city. That means that you are going to be able to offer your food for more or less depending on where the customer lives.

And here’s the thing: if your customers are paying 30% more for their food, then that means they would have been willing to pay you that 30%! So you are not giving away money to the apps that list your food offerings, but you are losing out in that sense. 

Of course, some restaurants are guilty of increasing their pricing for those using the app. This is because they want to cover their own incurred expenses, while at the same time trying to encourage people to come to them directly (where there is no competition).

At the same time, some sites that list food and handle delivery have been known to take commission themselves before paying the rest to the restaurant. In other words, they are selling the food at a markup – almost like a ticket tout!

It gets more complicated too when you consider all of the different delivery apps and services available. Which one do you list your food on? Do you list your food on all of them? How do you explain to customers why the price is so different on each one?

Keep in mind that these apps aren’t adding any value, or doing anything to differentiate themselves from one another!

Whatever the case, this is hardly an optimal solution. And in a post-COVID-19 world, you can’t rely on these third-parties as to the major way that you bring money into your business.

So, What do You Do?

The answer is to be smart and to take back control of your own home delivery. That way, you can define your own pricing and you can earn the maximum profit for providing the best service possible. You control the experience for your customer (no getting bad reviews because a delivery service let you down), and this also gives you the opportunity to innovate. You could introduce a reward scheme or membership system for instance and encourage more people to buy from you!

AND you get to keep all the tips (or your drivers can share it amongst themselves).

And the good news is that it is relatively simple to let a web development company build an online ordering service for you. At BAMS.com, we are offering to implement a powerful and highly intuitive ordering platform for your site. This will make it extremely simple for your customers to order from you, and it will integrate seamlessly with your current systems.

Now you have the power back in your court and it’s up to you how you want to deal with customers and how you are going to handle transactions and pricing.

This is something that more and more businesses should start doing. Not only does it make your company seem significantly more modern and prepared, but it also makes it simple for you to collect orders and deal with them as you see fit.

There are countless more benefits to handling your online ordering yourself too that we didn’t get a chance to discuss here. How about handling and anticipating high volumes of orders? The list goes on and on, so future-proof your business in this post COVID-19 world and build an ordering platform you can control today!