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Looking to start a food delivery service? Inhouse or third-party?

This is the second of a two-part series on how foodservice operators can put a delivery service in place.

Image courtesy of iStock

April 20, 2020 by Richard Traylor — Writer, WebstaurantStore

Editor's Note: This is the second of a series on how convenience services operators can put a delivery service in place.

Food delivery is proving to be a viable solution in light of the current COVID-19 outbreak which is proving economically challenging for foodservice operators due to extensive business closures.

As explained in the first part of this series, many foodservice operations are turning to a food delivery service — whether it's delivering their own food or a partner's.

If you decide to incorporate a food delivery service into your business, the most important decision you'll have to make is whether to use a third-party service or build your own inhouse team.

The benefits of an inhouse delivery system

Wondering how to start a food delivery service at your establishment? If you have the time and money to train and build an inhouse delivery team, you should consider this option before going straight to a third-party service. Two examples of well-known companies that use this delivery model are Starbucks and Panera Bread.

One of the main benefits of creating your own delivery service is that it eliminates the chance that consumers may think of the delivery service before your business.

You'll also increase brand loyalty and visibility and ensure you won't be overshadowed by the big third-party services that your competitors may be employing.

According to recent studies, 76% of consumers revealed that they prefer to order directly from the foodservice operation of their choice rather than through third-party services. On average, maintaining your own delivery team is also 46%-50% cheaper than employing the services of third parties. This will also boost your revenue, since you're collecting 100% of the profits from each meal served.

Finally, making the choice to build your own delivery team provides your business with complete control over the consumer's dining experience, from ordering and meal preparation to delivery and payment. Your trusted employees will also be the ones interfacing with customers rather than the unknown staff of third-party companies.

Potential disadvantages of inhouse delivery service

While there are a number of benefits to creating and maintaining your own delivery team, doing so isn't practical or feasible for every foodservice business. If you run a small business, chances are you don't want to assume the cost of training an inhouse delivery staff. Similarly, if you shop around for services, you're likely to find a third-party company with a low commission that will help your small company's bottom line and raise your profit margins.

Benefits of partnering with third-party companies

There are a number of benefits associated with partnering with a third-party delivery service. In addition to increasing your brand's visibility and boosting sales, these companies allow you to minimize losing customers due to busy signals on your phones or long wait times. Hiring a third-party service is also a smart choice for businesses with managers and owners who don't want the responsibility of hiring and training an inhouse delivery team.

Your customers will also appreciate that third-party services allow them to place repeat orders and may even have apps that save their credit card information for effortless ordering in the future. Many of these companies are also in competition with each other in order to attract more businesses, which can also drive down service charges and commissions.

Potential disadvantages of third-party delivery services

While hiring a third-party delivery service is intended to increase your business's profits, there are important liability issues to consider. In addition to third-party drivers becoming involved in automobile accidents, there's also a chance that customers could develop foodborne illnesses from meals that have sat in a car for too long. Because your foodservice operation isn't directly responsible for these issues, you need to be prepared to protect your business.

To minimize your risk, you'll want to draw up written partnership agreements with all of the delivery services you work with. Include the following provisions in these documents:

Require that delivery companies comply with industry standards for safe food handling (including temperature maintenance). Similarly, choose services that use GPS tracking to fully establish responsibility in case of foodborne illnesses.
Require delivery drivers to provide proof of insurance and clear vehicle ownership.
Include specific language that shifts full responsibility for any issues in transit onto the third-party service.
Require the delivery company to have insurance coverage that names the specific businesses they're partnered with.
Include specific disclaimer language in delivery menus, paper ads and on your website to anticipate potential customer concerns and complaints.

Tips for food delivery

If you're ready to add delivery services to your food truck, follow these steps to get started:

Update your technology. Consider getting an updated point-of-sale system, a new website for online ordering, or an app for mobile orders to help decrease the amount of overall customers waiting.
Train food truck staff. If you choose to hire your own delivery drivers, they will need to be trained on the best way to place the food in their cars so no spills occur and how to speak to each customer when they deliver the food. If hiring a third-party delivery company, those drivers need to know that they're responsible for representing your brand and should act accordingly. Remember that reviews can make or break your business, so it's important that the company you've partnered with and the service they provide is polished, professional and virtually error free.
Create a delivery menu. Making a separate delivery menu can help simplify cooking and packaging for your staff. Start by choosing from some of your most favored menu items and thinking about foods that don't get too hot, too cold, too soggy, or that might melt to be added to your delivery menu. Also ask your staff which meals and sides they think would be good additions for your delivery menu.
Stock delivery supplies. Be sure to stock up on take-out containers, utensils, napkins, lids, cups, pizza boxes, condiments and insulated food delivery bags so that your staff never runs out of the items needed to complete an order.

Part three in this series will explore how to set up a no-contact food delivery service.

For an update on how the coronavirus pandemic is affecting convenience service operators,click here.

Foodservice

About Richard Traylor

Richard Traylor graduated from Temple University in the winter of 2014 with a degree in Strategic Communications. After graduating, he taught English in South Korea for two years, during which he was fortunate enough to travel and see the world. In October 2016, he returned home and started to work in SEO Content at Webstaurant Store. This blog previously ran on Webstaurant Store.

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