In 2009 I started a 7 year journey building a drop off catering business that started primarily within the Chicago loop or downtown business district. As our company grew, we also opened stores in the Chicago suburbs, Washington DC and New York.
I had limited experience and learned so much from my partners, our CEO and Executive Chef, who both had significant catering experience and strongly believed in building this business, together we started a journey that created an amazing catering business and I believe was one of the best drop off food services in the city.
Of course all these drop off catering orders were delivered by our own team. This may not have been the only option but overall there were very few other options. There were no third parties, like DoorDash and outside of some courier services you were on your own to get your food out the door.
I have always loved the idea of self delivery, despite its obvious challenges, I always felt having ownership of the full customer service experience was worth the additional headaches. I saw it first hand with some brands that knew how to do it well, Potbelly Sandwiches Works, with our bike couriers, Pompei Bakery with up to 12 drivers per shift, and then later on with Jimmy Johns.
I am not going to bore you with what is already common knowledge, most brands don’t want to do delivery, and sourcing it out to other contractors is now the norm. I understand the immense challenges presented by short staffing and difficult hiring. It’s a lot of work, it creates uncertainty, and potentially inconsistency in our operations.
The pendulum often swings widely in one direction but sooner or later it finds an equilibrium. I believe we are now seeing the pendulum begin to swing back as operators are realizing and adjusting to a business model that is now dependent upon off premises sales to make profits.
I believe there is still a viable case for contracted delivery, especially for standard delivery food orders. When it comes to catering orders I think there is a strong case to be made that you should do it yourself.
Anytime an employee of ours can get “cash” tips at their job it’s usually a good thing. I always enjoyed delivery, especially catering delivery because it has almost always had positive financial consequences for both my restaurants and my team members.
There are pros and cons to self delivery and I want to go through these. I also think that a hybrid system offers the best overall solution especially for restaurants with fewer, and more inconsistent sales patterns.
- Data ownership – Twenty years ago, this wasn’t an issue. But now, data is a big deal.
- I spent 14 months at Olo working with brands that were obsessing over collecting customer data but then didn’t think twice about giving it away to ezcater.
- Restaurant businesses want access to valuable customer information, order history and feedback. This data can be used to improve operations, build relationships and make informed business decisions.
- Increased control over delivery operations – It gives restaurants complete control over their delivery process.
- They are responsible for hiring and training drivers and the delivery experience itself.
- This will help maintain consistency and quality in the customer’s eyes.
- The sales opportunities of controlling delivery are immense, and too nuanced to discuss here, but it’s worth it
- Cost savings – Self delivery is more cost efficient in many cases, especially with solid volumes.
- A self delivery driver on average does 4x more deliveries in the same hour as a contractor
- Retention of staff can increase as the fees and tips provided to delivery employees that also work in the restaurant increases the average wage
- Brand/Sales building – Self-delivery can also serve as a marketing tool by allowing restaurants to showcase their brand and values through the delivery experience.
- Providing top-notch customer service builds customer loyalty and attracts new ones.
- Faster delivery times, improved accuracy and increases repeat business
I realize this won’t be the case in all scenarios, but my catering delivery team made more money per hour than any other employee. My best made an extra $300-$400 in tips each week. Also, we actually had a profit/expense line item on our P&L’s that in our urban locations were always positive, meaning we added to the bottom line from doing our own delivery.
Here is the key, cross utilize your team to do both, work in the restaurant and take catering delivery orders. You don’t hire drivers, you hire team members that learn how to deliver. The conflict between your peak lunch rush and deliveries will exist, and that is the piece you must find a way to balance. Third party contractors can certainly help you at this pinch point.
While there are certainly benefits to offering self-delivery, it is also important to consider the potential challenges of this model.
After all, there’s a reason so many brands have opted to partner with third-party apps.
- Logistics – Managing a team of drivers and maintaining delivery vehicles can be complex and time-consuming for restaurant owners. They will need to acquire additional resources and expertise to manage properly.
- Increased liability – Restaurants may be responsible for any accidents during delivery. This comes with potential legal and financial risks that must be carefully considered.
- Cost – There are a number of additional costs associated with establishing and maintaining your own delivery resources
- Equipment like hot bags, delivery carts
- Signage for delivery vehicles, along with compensation for drivers to use their own cars
- Purchase, maintenance, insurance of delivery vehicles if you choose this route
- Adding addition staff may increase costs depending on your ability to cross utilize, along with the associated costs of hiring
Self-delivery can be a viable option for restaurant businesses looking to streamline their operations, own customer data and provide a more personalized customer experience.
However, it’s important to carefully consider the potential challenges and weigh them against the benefits before deciding. Whether you choose to manage your own delivery team or outsource to third-party services, what matters most is finding the right approach for your unique business needs.
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