In today's economically uncertain landscape, businesses are tightening their belts, and the restaurant industry is no exception. As Dublin service providers strive to serve and attract a broader range of customers, keeping costs low becomes imperative. While home delivery has become an integral part of the restaurant business, partnering with marketplaces can prove to be expensive. Commission rates ranging from 20-30% coupled with limited control over refund policies can significantly impact profitability. In this blog post, we will explore two options that can empower restaurant businesses to maximize savings on delivery fees.
Option 1: Partnering with an External Logistics Provider
An external logistics partner, also known as a third-party logistics provider (3PL), can be the key to maintaining a competitive presence in the market without incurring hefty commissions. While food logistics partners are typically associated with supply chain management, such as refrigerated trucks for goods delivery, there is an area where 3PLs like Ondway can assist restaurants in delivering hot and packaged meals on demand. This applies to both internal orders (from the restaurant's website, app, or phone) as well as deliveries received from restaurant aggregators.
How can it save money? Restaurants can benefit in two ways:
Offloading internal delivery fleet management: Managing an in-house delivery fleet consumes time and resources. Partnering with a 3PL allows restaurants to focus on their core operations while reducing marketplace commissions from 30% to approximately 15%. As logistics experts, 3PLs can consolidate direct and marketplace orders, resulting in more cost-effective, productive, and efficient deliveries to customers.
Gaining control over delivery fees: This advantageous situation provides restaurants with greater control over the delivery charges imposed on their end customers. They can choose to assume the full cost, split it with the customer, or pass it entirely to the customer.
Know how much you will save using Ondway with our calculator:
Option 2: Establishing a Direct-to-Consumer Channel
A direct-to-consumer (D2C) channel, often associated with multinational corporations like McDonald's or Burger King, is now within reach for small and medium-sized enterprises. With user-friendly and innovative technology, even local restaurants can access this market.
A D2C channel involves bypassing intermediaries, such as marketplaces, and directly accepting online orders and deliveries through the restaurant's own website or branded app. Several approaches exist to build a D2C channel: developing in-house solutions, hiring programmers and applications, or partnering with SaaS platforms like Flipdish that specialize in online ordering and management. These technology solutions differ from regular programmers due to their expertise in the restaurant industry and additional offerings such as marketing support, delivery partnerships, and POS integrations via APIs.
How can SaaS providers help the restaurant industry?
Flipdish, a leading SaaS provider, enables restaurants to "receive orders directly through their own websites/apps and grow their business with marketing and loyalty campaigns," thereby increasing revenue and reducing commissions. They handle all technical aspects, including:
Building a branded website or integrating an online ordering system into an existing website.
Creating user-friendly branded mobile applications for iOS and Android.
Integrating "Order Online" buttons directly on Google and Instagram.
Building a customer database.
Running targeted marketing campaigns to boost orders and reach.
Implementing a delivery solution, either in partnership with their own delivery team or with delivery partners like Ondway.
By partnering with SaaS providers, restaurants with limited resources and technical expertise can elevate their businesses while minimizing risks such as installation time, lower upfront investments, and specialized technical knowledge.
Why should the restaurant industry consider a direct-to-consumer channel?
Reduce or eliminate commission fees: By leveraging a D2C channel, restaurants can lower commission rates from 20-30% to 5-10%, or even eliminate them entirely, depending on the chosen model.
Access to customer data: Understanding customer preferences, ordering frequency, and more allows restaurants to tailor their offerings and nurture long-term customer relationships.
Smarter marketing campaigns: With valuable customer data at hand, restaurants can create targeted campaigns that highlight relevant promotions and offers, maximizing engagement and conversions.
Control over the customer experience: From order placement to delivery, restaurants can ensure a seamless customer experience and stay in constant communication, resulting in higher customer satisfaction and loyalty.
Real-time updates: Need to make menu changes during service? With a direct channel, restaurants have the flexibility to update their offerings at any time, as frequently as needed.
In a competitive market, reducing delivery fees is essential for the financial health of restaurants. By considering options like partnering with external logistics providers or establishing a direct-to-consumer channel, restaurants in Dublin can optimize their operations, enhance profitability, and provide exceptional customer experiences. Embracing these strategies empowers restaurants to take control of their delivery costs, strengthen their online visibility, and unlock long-term success.
Remember, staying ahead in the restaurant industry requires adaptability and innovation. By exploring new avenues for cost savings, restaurants can thrive in challenging times and ensure sustainable growth.