If you run a small business, you've likely seen that customer demand for deliveries is here to stay. Since the pandemic, more people now expect:
Overall, fast casual and fast food delivery increased by over 11% year-over-year in January 2023. Looking forward, online food delivery services are projected to grow at an annual rate of 13% through 2027, with the market expected to reach $1.65 trillion.
Food and groceries might be the most popular local delivery, but it impacts every type of business. Whether it's flowers, alcohol, prescription meds, hobby supplies, plants, workout gear, or cleaning products — people want it all delivered.
Local small businesses looking to increase market share but lacking delivery services must take action now. To attract new customers and keep current ones, you'll need to either start your delivery service or team up with third-party delivery companies.
In this article, we'll delve into how third-party food delivery services work, check out some popular options, and explain the basics of third-party logistics.
TABLE OF CONTENTS:
How Third-Party Delivery Services Usually Work:
These providers simplify the ordering and delivery process in exchange for commission fees. Customers also pay a delivery fee and tip the driver.
Business owners have some flexibility with these services. If you prefer to use your delivery drivers or accept pickup orders, you might be able to use just the platform's ordering system.
While third-party delivery services offer many benefits, which one should you choose? Here are our top picks:
DoorDash is rated 3 out of 5 stars by merchants and helps many businesses expand their customer reach with online food delivery. Since 2013, it has generated $100 billion in merchant sales. You can add your business to the platform with different commission rates based on your desired level of in-app marketing:
If customers choose to pick up their food from local restaurants instead of dining in, the commission is 6% for all orders.
If your restaurant has its delivery service and you want to be listed on the app, you can use the Self-Delivery tier. This option has lower prices and gives you access to marketing on DoorDash.
Don't have an online ordering system? DoorDash’s Storefront has 0% commissions and makes it easy to add an online store to your website. You’ll just pay the usual debit and credit card processing fees.
GrubHub is a popular third-party delivery platform that offers more than just delivery services. It also helps restaurants market and promote their business with promotional tools and a branded ordering website.
GrubHub, part of the Just Eat Takeaway.com family with over 355,000 restaurant partners, offers several service plans:
Basic
Plus
Premium
GrubHub’s fees are mid-range, but you gain access to a large customer base of over 31 million active users.
What do users think of GrubHub? The platform has a 4 out of 5 stars rating on G2.
You've likely heard of Instacart if you're in the grocery business. However, the platform also caters to e-commerce businesses, retailers, convenience stores, and restaurants.
In addition to third-party delivery services, they provide:
Instacart is a popular and convenient platform. Yet, they lack transparency regarding fees and pricing for merchants. You'll need to reach out to them directly for more information in this regard.
However, they do offer businesses various tools to handle orders, manage deliveries, market their brands, and more.
What's the user rating for Instacart? The platform receives 4 out of 5 stars on G2.
Uber Eats stands out as one of the most renowned third-party delivery services. In 2020, they acquired Postmates, broadening their 3PL market share. Presently, the platform is utilized by over 825,000 businesses.
While many associate this platform with food delivery, Uber Eats for Merchants caters to a variety of businesses, including:
Their platform links your business with independent drivers, scooter riders, bikers, or even walkers who handle your deliveries.
Uber Eats for Merchants offers a range of pricing options, making their service more accessible to businesses.
Here are their pricing plans broken down:
Lite
Plus
Premium
Self-Delivery (use your delivery staff)
Uber Eats may have significant fees, but with around 85 million users on their app, each plan offers a chance to significantly expand your restaurant's reach.
What's the user sentiment toward Uber Eats? The platform boasts a 4 out of 5-star rating on G2.
GoShare's website and mobile app aid businesses in delivering a wide range of items, from small parcels to large boxes. Companies can:
Businesses enjoy an upfront pricing algorithm that can save them up to 50% on delivery costs while ensuring fair compensation for drivers. Scheduling is accessible seven days a week, from 5 am to 11:30 pm.
Various delivery options include:
Delivery.com lets people order online from their favorite local businesses with easy, quick, and free ordering on any device. It's a one-stop shop for everything from food to dry cleaning. Plus, users earn Delivery Points with every order, which can be redeemed for credits, prizes, and donations.
Delivery.com offers:
Join over 12,000 businesses attracting new customers with delivery.com.
Each of the services and apps mentioned above is reputable and well-established. The optimal selection for any business varies based on its circumstances.
Consider these questions before making a decision:
Some delivery services have geographic limitations. For instance, DoorDash only operates in North America. Ensure the service you choose aligns with your country, region, city, or even neighborhood.
Some services charge a fixed fee per delivery, while others take a percentage of the order total. Find the option that helps maintain your profit margins.
Align the service with your market: Restaurant customers likely prefer delivery within half an hour, while grocery customers may tolerate waiting a few hours or even overnight. Research reviews and seek recommendations from peers.
Seamless technology integration can alleviate numerous challenges. Evaluate the service's compatibility with your existing systems, such as point-of-sale or inventory management systems.
Assess the level of flexibility needed. Determine if features like custom delivery time windows, order tracking, or proof of delivery are necessary. Categorize these features as dealbreakers, nice-to-haves, or irrelevant.
Now that we’ve explored individual delivery services, let’s delve into some background information. Feel free to skip this if you’re solely interested in reviews!
In a general sense, third-party logistics (3PL) involves delegating logistics and supply chain tasks. These include warehousing, order fulfillment, and last-mile delivery to specialized service providers. These are intricate operations, and for many businesses, it's helpful to concentrate on their core competencies while entrusting logistics to expert 3PL providers.
Take the restaurant industry, for instance, which primarily focuses on preparing food rather than transporting it across town. Establishing a fleet of delivery drivers or overseeing an in-house logistics system rarely proves workable. This is why many restaurants opt to use Uber Eats or comparable food delivery apps to handle their online ordering and deliveries.
A 3PL network may consist of:
Certain providers, like GrubHub, offer a complete ordering system solution. Customers can quickly and effortlessly place food orders, smoothly moving from your restaurant's website to the 3PL backend.
While leveraging third-party delivery services can ease the expansion of your delivery service, there are drawbacks to consider. Customers are aware of this. According to one survey, 70% expressed a preference to order directly from a restaurant or food service to ensure their money doesn't go to middlemen.
By carefully considering the pros and cons and navigating legal and compliance issues, you can make an informed decision about the suitability of third-party delivery services for your business.