Consumer habits have shifted dramatically over the last few years. Convenience is no longer an optional luxury. Shoppers and diners expect their favorite meals, groceries, and retail goods to arrive directly at their doorsteps. For small business owners, this shift presents a massive opportunity, along with a significant logistical challenge. Meeting this demand requires a reliable delivery system, and building one from scratch is rarely easy.
The Advantages Of Using Delivery Apps
Partnering with established delivery platforms offers several immediate benefits for local shops and restaurants. These apps provide tools and resources that would take years to build independently.
Instant Access To A Massive Customer Base
Delivery applications spend millions of dollars on marketing to acquire users. By listing your business on their platform, you instantly tap into that existing audience. Many consumers open a delivery app without knowing exactly what they want to buy. They scroll through the options, making decisions based on photos, ratings, and proximity. Your business gains visibility among people who might never walk past your physical storefront.
Zero Logistical Headaches
Running an in-house delivery service is highly complex. You have to interview, hire, and train reliable drivers. You must pay hourly wages, manage shift schedules, and reimburse for gas or vehicle maintenance. Commercial auto insurance adds another hefty layer of expense. Third-party apps handle all of these logistics. When an order comes in, a driver simply appears. If a driver calls in sick, the algorithm automatically routes the order to someone else.
Built-In Marketing And Promotions
Most major delivery platforms offer internal marketing tools. You can run promotions, offer free delivery for first-time buyers, or feature your business at the top of the search results. These built-in promotional tools help you boost sales during slow periods without needing a dedicated marketing team.
The Disadvantages Of Third-Party Services
Despite the clear conveniences, relying on external applications carries substantial risks. Small business owners must weigh these drawbacks heavily before signing a contract.
Steep Commission Fees
The most common complaint about delivery apps is the cost. Commissions typically range from 15% to 30% per order. For businesses operating on tight margins, handing over a third of the revenue makes it nearly impossible to turn a profit on those specific sales. A high volume of delivery orders might inflate your gross revenue, but your net income could remain stagnant or even drop.
Loss Of Quality Control
Once your product leaves your store in the hands of a freelance courier, you lose all control. You cannot guarantee that the food stays hot or that fragile items remain intact. Couriers often pick up multiple orders at once, leading to extended transit times. If a customer receives a cold meal or a damaged product, they rarely blame the app. They blame your business. This can lead to negative online reviews that damage your local reputation.
Separation From The Customer Relationship
When a customer orders through a third-party application, the platform owns the customer data. You do not get their email address, their phone number, or their marketing consent. You cannot follow up with a personalized thank-you note or a discount code for their birthday. The platform intentionally builds brand loyalty to the app itself, rather than to your specific store.
Strategies To Make Third-Party Delivery Work
If you decide to utilize delivery platforms, you must be strategic. Simply turning on the tablet and accepting every order at your standard prices is a fast track to losing money.
Adjust Your Menu And Pricing
Many businesses create a specific menu exclusively for delivery apps. Remove items that do not travel well, such as delicate pastries or meals that get soggy quickly. Focus on items with high profit margins to help absorb the commission fees. Additionally, most businesses mark up their prices on the app. A sandwich that costs ten dollars in-store might cost twelve dollars on the app. Customers generally accept that delivery comes with a premium price tag.
Convert App Users To Direct Customers
Use the delivery app as a customer acquisition tool. When packing an order for a third-party driver, slip a branded flyer into the bag. Provide a special discount code that customers can use if they order directly through your own website or call your store next time. This tactic slowly moves buyers away from the high-commission platform and into your direct sales funnel.
Negotiate Your Rates
Delivery platforms advertise standard commission rates, but these fees are sometimes negotiable. If your business generates a high volume of sales or holds a strong reputation in the local community, you have leverage. Contact a representative at the platform and ask for a lower tier. They might reduce the fee in exchange for an exclusive partnership where you agree not to use competing apps.
Since 2005, Quikstone Capital Solutions has been a trusted advisor to thousands of merchants. Quikstone provides these merchants with easy, fast, and flexible working capital for all their business needs. If you need cash for your business, contact us today. We have only one goal: to help your business succeed.
