Before we dive into this article, I want to expand on the difference between onDemand Delivery vs Third party delivery. OnDemand delivery companies are companies that charge a fee for restaurant businesses or direct customers to delivery food to them while 3rd party delivery are companies that provide a platform for restaurant to sell them food and hence customers have to go to the third party platforms to place their which then allows the platform to both charge the restaurant and customer a fee for both the service and delivery of the food. Check out this article on how UberEats, Foodora and Skip the dishes aren’t as profitable to restaurants.
Here are some of the reasons restaurants are forced to use 3rd party delivery
- Exposure. The platform gives restaurants a way to get exposure. Customers already have apps like UberEats and DoorDash installed on their phone and can easily search for the restaurant close to them based on their criteria.
- Delivery. Lots of Restaurants don’t have a delivery network and depend on these companies to do delivery for them.
- Food Packaging. Lots of restaurant do not want to invest into the right type of marketing and packaging for their foods and instead will use the packaging from 3rd party food delivery companies
- Payment Processing. 3rd party food delivery companies handles the payment processing for restaurants which makes it one less thing to deal with.
- Communication Method. 3rd party food delivery apps come with a messaging feature that allows customers to directly communicate with the restaurants. This interaction makes it easy for restaurants to connect and fix customer issues as they arise
Here are some of the reasons why Restaurants need to move into onDemand Delivery Solutions
- Cheaper. 3rd party food delivery companies charge about 20%-30% to delivery food to customers. This is a huge lost to both the customer and the restaurants. There are numerous reports that this has cause lots of restaurants to go out of business. OnDemand delivery companies like Postmates and ShiftPixy provides on-demand delivery for restaurant via their Api
- Brand Awareness. Using an on-demand delivery solution allows restaurants to provide their own online ordering system or mobile ordering system and even packaging. They can brand their website or mobile app and allow their customers to directly place orders from their platforms. This will allow a restaurants to build a long term brand and connect to their customers even better. Orderax is a company that provider Mobile ordering app to restaurants.
- Control. Restaurants are able to control every aspect of their business except the delivery. This allows them to directly connect with their customers .
- Reduce loss of customers to competitor. Business with over 50% of repeat customers lose their customers to competitors because of the 3rd party food delivery companies.
- Get Payment Faster. Restaurants can directly connect to payment processing platforms like Stripe or Square to process their payment via their Api. Because of this direct connection, Restaurants can get paid faster and as early as the next day.
On-demand delivery is not currently as feasible for all restaurants but restaurants with 50% or more repeat customers should use an ondemand or inhouse delivery companies because this will save them about 20% compared to 3rd party delivery fees. New restaurants or restaurants that require exposure will benefit from continuing to use 3rd party food delivery services.