IN-HOUSE FOOD DELIVERY
VS
THIRD PARTY FOOD DELIVERY
Third-party food delivery services were a novel idea when Seamless first appeared in 1999. Since then, third party delivery platforms have become a permanent fixture in the restaurant world. The global outbreak of COVID-19 forced many restaurants into offering delivery. The decision they had to make at this point is which business model to adopt — in-house vs thirdparty food delivery. We’ll evaluate the pros and cons of in-house vs third-party food delivery so you can choose the best option for your restaurant. In-house delivery Choosing in-house delivery means building your own dedicated delivery staff and securing a fleet of vehicles to deliver orders to customers. While it may seem appealing to keep the business in house, developing a delivery service requires addressing things such as insurance, gas consumption, vehicle maintenance, and parking spaces. Not only will you need company vehicles, but you may also need to hire dedicated delivery staff and purchase additional inventory — such as insulated bags — to ensure the food arrives in peak condition. Pros of in-house delivery • You reduce the number of people who touch food orders, which improves food hygiene and builds customer trust. •
You get the freedom and flexibility to define your product offering and business model.
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You get to keep 100% of the meal price rather than splitting any portion with a delivery company.
Cons of in-house delivery • Your ability to scale in-house delivery operations is constrained by the capital you have available. •
You may not have the expertise to run a smooth in-house delivery system. A lack of competency in delivery logistics can negatively impact your customer experience and business reputation.
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Third-party food delivery Third-party food delivery companies partner with restaurants to provide customers with a platform to browse menus, place orders, and have food delivered to their doorstep by a third-party courier. These services operate independently of your restaurant, using a dedicated mobile app and their own resources to take the responsibility of delivery entirely out of the restaurant’s hands. Pros of third-party food delivery • You gain access to these companies’ established marketplaces and broader delivery regions. •
You don’t need to advertise and promote your delivery service because hungry customers are already on these apps browsing through the available restaurants.
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You can lower your fixed costs because you don’t have to pay insurance costs or wages to delivery staff.
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You can focus exclusively on the end product without worrying about delivery.
Cons of third-party food delivery • You’ll likely have to agree to steep revenue-sharing models with some third-party food delivery apps. •
You have no control over the third-party company. This can negatively impact your business’s reputation if the delivery company’s customer service is unsatisfactory.
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You may experience communication issues with regard to orders, which can ultimately impact customers.
