It’s not a secret that the delivery service arrives to change our life. The Covid-19 pandemic accelerates the process that is happening for a long time. Our life moves faster, we have less time than the previous decades, this is an unquestionable truth. We can mistakenly think that this only happens in the food industry or only in some countries, but the fact is this happening, fast and some business can’t be catching up, and others are growing fast. This change is affecting positively and negatively lives of people around the world, and like every change has two sides.
The business now has a way to satisfice the demand of his customers and even grow his market with access to more customers than ever. 10 years ago, the restaurant industry base all his sales on dine-in and pick up, just a few restaurants offer the delivery service. But now it’s impossible to think of a restaurant without a delivery service, and this change happens in only four years, and it’s speedy up this year. People have more options to order than before and restaurants and businesses sell more.
The owner starts offering delivery service through an online platform without any hesitation and plan, which has led businesses to a position for which they were not prepared. Owners are willing to pay 20% to 30% on commission to this timely and handily online platform to get more sales. But sooner or later, they find this has a dark side.
When the business pays 20% or 30% for each sell, he gets an unquestionable partner, a partner that many business owners didn’t plan to have. A partner that takes a significant cut from the sales and without the cost that implied run a business. This doesn’t make this online platform terrible, just expensive, too expensive. Many owners realized this situation, and they raise the prices of their products. This bring a new problem to our economy, we have seen how slowly but unstoppable raising prices, a good example of this is the restaurant industry, if the customer buys directly to a restaurant he save almost 45% compared to platforms, and don’t get me wrong, we all must pay for comfort, but 30% to 45% more for the same product is absurd. But this is the only way that many restaurant owners think they can use this convenient service and don’t die in the process.
Apart from the rising prices, a business owner has a second problem; there are losing his customers, customers that take many years to get to this online platform. As CEO of a third-party delivery company, I know this first hand. I saw how a huge local restaurant chain loses 25% of his current delivery customers the first week they start using a market place. Without realizing it, they gave 25% of their clients to this online platform, now they pay 30% to sell to their customers, and this is just one case, some owner loses 40% or 60% of his delivery customers. This happen for many reason, restaurant and business don’t have any online systems, slow drivers, problems with their phones sales and customers want to get orders faster than before.
But today, business owners have more options to sell online and made deliveries without the high cost to use marketplaces, and I’m not saying the marketplaces are bad, but the owners can’t focus and promote businesses that are not theirs. Every time an owner put the logo of a marketplace outside of their business, their flyers or menus there are punching his customers to the marketplaces that charge them 20% or more, there are allowing their customer to look at other options, and you as a business owner don’t want that. The Marketplace needs to promote itself; the owner needs to promote their business.
As I said before, the owner has more options today than before. You can create your online sale platform or use a platform base on flat fees, you can find many, many good options. You can hire a third-party delivery company that provides you with the driver you need and all of this without stopping using marketplaces, even you can renegotiate with your marketplace provider, few of the national marketplace companies are willing today to lower their fees if you make de deliveries, allowing you to save between 9% to 15% for each sell.
Remember, you don’t go finishing to give your catch to another company that sells you the same fish for a higher price.
Delivery it’s one of the best things that happen to the business in many decades, but you need to capitalize all the opportunity for your business, always run the numbers, always look for what its best for your customers and your business. Marketplaces need to bring you new customers, not make your customers theirs. Using third-party delivery companies, you can save a crazy amount of money, keep your customer loyal to your brand, and even use marketplaces with half of their regular fees. Taking smart decisions around delivery gives you a great chance to grow in this new paradigm of business.