Right off the bat, let me say that I completely 100% understand that providing your own delivery service, in-house, can seem like a daunting task, but it really doesn’t have to be.
You are basically hiring someone to put food in a bag and drive it some place. Ok, there’s a bit more to it than that, but still, that’s the long and short of it. And when you consider how much you can save by setting this service up, especially in an industry with razor-thin margins, it’s a no-brainer.
As part of your restaurant management responsibilities, your job is three-fold.
1. Increase the efficiency of your restaurant
2. Increase the customer service experience for your guests
3. Increase restaurant profits
And with your own in-house delivery service, you kill all three birds with one stone. Check it out.
78% of people would rather give their money directly to the restaurant to support them than a 3rd party delivery service.
Should I Even Start My Own Delivery Service?
Before we get started on how to start your own in-house delivery service, the first thing you need to do is decide if it’s right for your restaurant. You need to consider things like:
- What sort of volume do you do?
- How many take-out orders do you get each day?
- What kind of food do you serve (make sure your food “travels” well)?
- Do you want to hire, train and maintain more employees?
If your volume and to-go orders aren’t high, then providing simple online ordering and pick-up is probably fine. But in this day and age when restaurant rely upon take-out to survive, there’s a good chance that your volume is pretty decent.
No matter what your situation, I’m going to play my broken record and strongly suggest staying away from 3rd party delivery services like GrubHub, Uber Eats, Doordash, etc. Yes, they bring you lots of traffic and orders, but they are exploiting your business for their own best interest.
I know it’s easier to just have them do it, but those 3rd parties will eat your profits down to crumbs and it’s better to leave delivery out of the picture and only offer pick-up service than allow those 3rd parties to vampire you into bankruptcy. Not to mention, they take a commission for pick-ups as well.
78% of people would rather give their money directly to the restaurant to support them than a 3rd party delivery service.
Advantages of an Online Delivery Service
One of the main advantages of offering delivery is that not all restaurants do, so it would give you an advantage over your competitors to capture the market share of those lazy people who consider whether a place has delivery or not as one of their main deciders for where they choose to order from.
In addition, it’s branding 101. When someone orders from you they interact with your restaurant over a period of time which becomes emblazoned in their mind (just make sure you provide a good experience from beginning to end or you are branding in the wrong direction). Consider all the contact:
- They deliver from your website or Facebook page (assuming you have online ordering), instead of Grubhub’s site set-up for you.
- Assuming you use your own delivery service your driver shows up at their door wearing a uniform or clothing with your logo on it. If you use a 3rd party delivery service, all they remember is that 3rd party name (i.e. GrubHub). Not to mention the texts they receive from Grubhub throughout.
- They eat your food (which we hope is delicious).
- Your packaging sits on their tables or counters for awhile (assuming you have branding on your packaging).
If a customer’s online ordering experience is good, there is a 67% chance they will come to your place to eat, which is the first step to creating a repeat customer.
In short, online ordering and delivery allows you to extend your reach and grasp a larger share of your local market. Even if that costs you a little more on labor, the overall benefits will usually outweigh those costs.
With that said, let’s get to the actual steps of setting up your in-house delivery service.
6 STEPS TO SETTING UP YOUR
ONLINE DELIVERY SERVICE
STEP 1: DESIGNATE A TAKE-OUT AREA
There’s a good chance you already have a to-go food area, but make sure it is fully stocked with take-out bags, boxes, cups, silverware, lids, condiments, etc.
In addition, if possible, have a separate area for customers who are picking up their orders to get their food and pay. This way there is no overlapping and confusion with your dine-in guests who may be lingering up front.
This also helps for delivery drivers who are scrambling to get orders together so they can deliver them on time. They are racing in and out of the restaurant, and if they have a designated area to work from, there is a lot less confusion and a lot less mistakes.
STEP 2: GET A GOOD ONLINE ORDERING SYSTEM
I know I’m biased here, but I’m biased for a reason. With all the great technology these days, you’re a fool-of-a-business-owner if you don’t take advantage of it.
The ROI and efficiency (not to mention peace of mind) you get in return for using quality technology systems is worth it ten-fold.
Allowing your customers to order directly from your website or Facebook page instead of calling you on the phone, saves you time, eliminates mistakes and actually increases your average sales per order (it’s proven that people add more to their cart online than they do when talking to an employee over the phone).
STEP 3: HIRE AND TRAIN NEW DRIVERS
You CAN use your current employees as drivers, especially if you have employees who want more shifts and they don’t mind doubling as a delivery driver.
However, I find that many restaurant employees might consider this a “step down” from working inside the restaurant, but with restaurants on limited capacity, beggars can’t be choosers.
Like I mentioned earlier, this might seem like a lot to take on, but it’s really not. It will include training them to:
1. Care. It’s really that simple and it’s listed #1 for a reason, because 3rd party delivery services don’t care about your restaurant at all. This is why there are so many delivery issues and stories of orders forgotten, spilled, delivered to the wrong address or well past the promised time.
From the time the food is put in the to-go bag to the time the food is handed off to the customer, your delivery people should care about their jobs and the orders they are fulfilling. This, of course, leads to good reviews and avoids the bad ones.
2. Pack up the food based on your standards. This includes placing everything neatly in the to-go bag so that nothing spills, as well as making sure nothing gets left out of the order, and that the necessary condiments, napkins and silverware are included.
3. Ring-up orders when the food is picked-up. Yes, they are delivery drivers, but more accurately they are your “To-Go Ambassadors”. Ok, that’s a more dramatic job title than is needed, but you get the point. They should be trained to take care of all to-go orders from answering the phone, to bagging the order, to ringing up pick-up orders, to delivering orders in person.
4. Hustle with caution. Lolly-gagging leads to getting behind, which leads to long delivery times, which leads to cold and wilted food. Imagine that you are Domino’s Pizza, training your employees to deliver the food in 30 minutes or less or it’s free. Hustle, hustle, hustle!
With that said, it goes without saying, of course, that they need to be careful when driving for the safety of everyone. Hustle with caution.
5. Teach customer service skills. Customer service isn’t just for dine-in customers. The purpose of dine-in customer service is to get them to come back to your restaurant again and again. The purpose of take-out customer service is to get them to order online again and again, which will more than likely eventually tempt them to also come for a dine-in experience.
With customer reviews so prevalent these days, it’s important that each delivery driver provide great service to keep that reputation of yours shining like a newly minted quarter.
6. Handle food safely. This is easily solved by having them complete an online food safety certification course, like Safe Serve.
STEP 4: TRAIN YOUR DRIVERS TO BE HYBRIDS
Since I’m all about systemizing and efficiency, I highly suggest training your delivery drivers to do other tasks around the restaurant so that during down time you are getting the most bang for your buck for every employee.
This could include: running food and drinks for servers, bussing tables, filling ice machines, sweeping, etc. Really, anything that a busser or barback might do during their shift.
However, I find that many restaurant employees might consider this a “step down” from working inside the restaurant, but with restaurants on limited capacity, beggars can’t be choosers.
In addition, if they are trained well enough, they could even cover shifts for other bussers and barbacks on the schedule. I’ve always said that there is nothing more valuable than a hybrid employee, because you can plug them in anywhere.
What you don’t want is to have no to-go orders coming in and your delivery driver (or two) standing around waiting for orders. Put them to work to get the most out of them.
STEP 5: ADD A DELIVERY FEE BASED ON DISTANCE
Many owners don’t make a move to create their own delivery service because they figure it’s going to cost them the same amount of money to pay their own drivers, so they just stick with GrubHub and the other delivery services.
They are correct. It will cost money, but not the same, and it can easily be covered by charging a delivery fee, which people are perfectly willing to pay for the convenience.
Take a look:
Costs of a Delivery Driver
-Wages – The median minimum wage (in the U.S.) is $7.25/hr.
-Gas – The median gas price (in the U.S.) is around $2.00 per gallon
If costs in your area are higher (as they are where I live), you’ll need to adjust, but we will work with the national median averages for this example.
You’ll need to decide how far from your restaurant you want to deliver. You can make the boundary whatever you want (i.e. 5 mile radius) and charge a flat fee no matter where you deliver, or you can increase the delivery fee based on how far away from your restaurant the customer lives.
Let’s Test It
Your goal for your delivery drivers should be at least 2 deliveries per hour. Let’s say that they make two deliveries in one hour that are both five miles away, and you are willing to pay for a car that gets 20 miles to the gallon.
Wages = $7.25 (1 hour worked)
Gas = $1 (10 miles traveled at $2 per gallon at 20 miles per gallon)
Total Cost to You For 2 Deliveries = $8.25
Minimum Delivery Fee to Cover Costs = $4.13 (2 deliveries x $4.13 = $8.26)
To make sure you cover all of your delivery driver costs, you could make your deliveries a $5 flat fee. It’s up to you. This is simply an experiment to give you a ballpark idea of what you should charge to cover your delivery driver.
It’s not a perfect science. As I mentioned earlier, if your take-out orders are slow that day and you have a driver or two on the clock, your labor costs will increase. No orders mean no delivery fees to cover the labor costs of your driver.
STEP 6: DECIDE ON DELIVERY DISTANCE AND ORDER MINIMUM
And last but not least, don’t waste your time and money on:
1. Driving too far
2. Delivery for too small of an order
Though it’s nice to capture your market share, it’s not efficient, nor economically feasible to drive 20 miles to make a delivery.
Similarly, delivering $5 orders all over town causes the exact same problems for you.
Make sure when you set-up your online delivery options that you set the parameters for how far you’re going to deliver (distance-wise) and what your order minimum will be.
No matter what you decide when it comes to developing your delivery service, remember this: even if you try to start your own in-house delivery service and it doesn’t work out, you haven’t lost much. You can still offer online ordering and payments to your customers who don’t mind picking up, and there are a lot of us who don’t mind picking up at all.
In addition, if you’re worried about customers not finding you on Google, there is plenty you can do SEO-wise to get your restaurant to show up in the search rankings without being bludgeoned for 30% of your sales.
If you have any questions about how to do that, we’re happy to help in that area as well.
In the meantime, I wish you the best of luck, whatever you choose to do.
See you next time,
Dave