Operations

Top 4 ways switching to first-party delivery can boost your profit

Keegan Barone
Marketing Associate

How do you switch from first-party to third- party? When guests are ordering from home more and more, third-party delivery apps have seen double their growth in the past year. That’s excellent news for Doordash and Grubhub, but what does it mean for you as an independent operator?

These apps offer convenience for their customers and create an easily searchable community for additional visibility. Still, some aspects are detrimental to businesses: high fees, low rates of returning customers, limited agency, and most importantly: unhappy staff.

Fortunately, a solution keeps convenience while decreasing costs, building loyalty, keeping delivery under your control, and increasing staff satisfaction. The switch to first-party is easy, and we break down the simple ways it improves your business.

1. Getting rid of third-party fees

If you’re using a first-party service, you are likely losing upwards of 30% of each sale to that service. Third-party fees have gotten so high that cities like San Francisco, New York, and Portland put a mandatory cap on commission fees. By switching to a first- party delivery model, businesses don’t just have to rely on their employees. Through companies like Door Dash Drive, Orkestro, and more, couriers are available for delivery. This takes the burden off your current exhausted staff and allows you have more control. While there are still costs involved in 1st party delivery, managing deliveries through your order-and-pay system will show a boost in revenue.

2. Earning customer loyalty

Third-party app formats are not conducive to a loyal customer base because they function “by category” and are not specific to restaurants. When emailing or targeting customers for marketing, third-party apps focus solely on getting these diners to their platforms — not your business. With first-party delivery, you’re the point of contact with the customer from start to finish. You’re able to curate the delivery experience and encourage customers to return with personalized service. You can even implement loyalty programs when using your systems to track returning customers.

3. Avoiding mistakes by third-party delivery drivers

Unfortunately, food deliveries can go awry. Deliveries can arrive late, damaged, or with missing or incorrect items. Who’s blamed for these mistakes? Most often, it’s the restaurant, not the third-party. For even minor order issues, third-party delivery companies will give the customer restaurant-funded refunds without contacting the restaurant. Even with the refund, an estimated 80% of customers say that they blame the restaurant anyway. However, by switching to first-party delivery, staff can control deliveries and resolve any issues directly. This agency allows restaurants to connect with customers and continuously improve their delivery experience.

4. Keeping restaurant staff from quitting

During the pandemic, in-venue dining decreased where 39% of consumers said they order delivery at least once a week. The switch has not only harmed your business’s revenue, but it has also reduced staff income as many employees rely on tips to augment their salaries. Tips go to third-party delivery instead of to restaurant staff. This reduces staff income, morale, and retention. With 1st party delivery, your team can make those deliveries themselves and earn tips, or, if you choose to use a courier service, will be able to focus on their in-venue jobs. Decreasing burnout is a huge part of employee retention, and easing staff burden is enormous. This will improve staff morale, provide further connection with your customers, and build brand loyalty.

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