Self-delivery remains a tricky concept for the majority of restaurant operators. Many, especially independents, are reluctant to hire drivers, deal with the overhead and manage the technology layer necessary to give consumers what they’re used to from ecommerce.
It was something we admittedly glossed over in our February exploration of the delivery balance sheet. For much of the industry, a true in-house delivery program can be more headache than it’s worth. Even after the pandemic surge, there’s not enough delivery to support it. Blum pointed to a lot of new customers that came calling in 2020 that just weren’t doing much volume with Relay, upscale fine dining, coffee shops and cafes got some orders, but not enough for an on-staff driver. For the right restaurants and operators looking to take on the challenge, the opportunity is “huge,” said Relay CEO Adam Blum.
“If you’re determined, you can just call Grubhub and Uber Eats and ask them to switch you to self-delivery and hire couriers. They’ll start sending you orders and your commission will go down. But the restaurant owner is now on the hook to deliver those orders,” said Blum. “Even though it’s a little more painful, the saving could be huge.”
Blum, who has delivery logistics operations in New York, Philadelphia and Washington, D.C., said his company is one option to get the best of both worlds: the marketing and orders from the third parties and letting the Relay driver network do the last-mile work. He said restaurant companies that switched to this model saved “$20,000 a year, that’s including our fees—the saving is just on the commission,” said Blum. “We can cut most of these third-party platforms drop their fee from 30 percent to 15 percent, so we can cut those commissions in half.”
The key there, he said, is relying on a logistics-only company like Relay that doesn’t have the other overhead costs of marketing, consumer engagement, or nearly the engineering staff of an end-to-end delivery platform.
In those major markets with delivery fleet options like Relay, of course, that implies a large volume of orders. But Blum said he has some key considerations for any restaurant doing its own delivery.
“The rule of thumb is you need one courier for 20 deliveries,” said Blum. “If you do 80 deliveries a day, you need more or less four delivery drivers or two times that for part time.”
He said the classic delivery standouts like Asian or Mexican cuisine and pizza will be best suited to do it themselves because they have the right menus and a sweet spot for menu pricing. By going it alone, those restaurants can also get the same kind of commissions from third-party platforms. Restaurants also set and receive the delivery fees on most platforms, Blum said.
He said, apart from his phone ringing, that has been a big change for the industry though 2020. Grubhub always offered self-delivery and moved to the DoorDash and Uber Eats model. Now all of the major platforms offer self-delivery as an option.
For those restaurants in the sweet spot with the right menu, pricing and proven order volumes on the third-party platforms, there’s not a lot of work to do. Tools like order integration make it easier, but open-source software and ubiquitous tools like Google Maps or Waze can be a good place to start testing.
Have you had success with self-delivery of third-party orders? Let us know how you did it in the comments.
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