Third Party Delivery Services: Guide for Restaurants

A few years ago, delivery wasn’t even on the radar for many restaurants let alone the restaurant startups. But things have changed. What was once a luxury, has become a necessity. 

Yes, I’m talking about food delivery. 

Or more importantly – partnering with Third Party Delivery Services to reach your customers with fresh serves on time. 

The rise of Third Party Delivery Services is reshaping the food industry, helping restaurants serve more customers than ever. But is it the right step for you?

Well, you will find the answer to this question in this blog by diving deeper into the nuances of having one. 

But first, let me give you some spoilers:

By the end of this blog, you’ll have a clear understanding of:
✅ What a Third Party Delivery Service does and how it works
✅ The benefits of partnering with a delivery service for your restaurant
✅ A detailed comparison of popular third party delivery platforms
✅ Key challenges restaurants face and possible solutions
✅ Checklist to help you choose the right delivery partner
...and much more to help you decide if a Third Party Delivery Service is the right fit for your business

What is a Third Party Delivery Service?

Third party delivery services are the middleman who partners with restaurants to process,  track, and deliver food orders to their customers. 

The services connect restaurants with customers who want the convenience of delivery without the restaurant managing it directly. They handle the entire delivery process, from taking orders to delivering food to the customer’s door. Most third party delivery services use mobile apps where customers can browse menus, place orders, and track their deliveries in real-time.

Image: The working procedure of Third Party Delivery Services 

This setup helps restaurants reach more customers without the hassle of running their own delivery service. However, it’s important to note that these services charge fees for their services, typically a percentage of each order.

Also Read: The A to Z of Restaurant Delivery Management Systems

Benefits of Using Third Party Delivery Services

Today’s diners expect convenience, and delivery is part of that.  Even if there are multiple ways to handle the entire delivery process or logistics understanding the benefits of having a third party delivery service provider will help you in the decision-making process for your own restaurant. 

Reach More Customers 

Gone are the days when your restaurant was limited to serving people within walking distance. With third-party delivery, anyone in your city can order from you. It connects you with people who might not have found your restaurant in other ways. So you’re not technically investing in advertising to get your restaurant discovered by a huge audience. Because a large number of them are constantly searching for food on third-party platforms. 

Streamline Restaurant Operations 

You can make the most out of your labor and optimize the entire workflow by partnering with a Third Party Delivery Services. Instead of taking orders, processing & sorting them, preparing them, and finally delivering them to the customer, your workforce can solely focus on preparation and other essential tasks that require immediate or continuous focus. 

By outsourcing deliveries, you can reduce the complexity of managing in-house delivery logistics. This way your workforce would be productive as well as help you run your restaurant meeting your customers’ expectations. 

Increase Brand Awareness 

If you partner with a third party delivery app that is trusted and a huge number of hungry customers scroll through every day to order their desired food – you win in so many ways. 

Those delivery apps track what people like. So when someone searches for “Best Burgers” or “Mexican Tacos,” and you’re known for those dishes, you pop up in their suggestions. Isn’t it effortless and great at the same time? 

Additionally, some delivery platforms promote restaurants through special deals and featured listings. So your restaurant gets even more exposure. 

Learn from Data Insights

Delivery apps hand you a goldmine of information about your business. By analyzing that information about your customer preferences, peak ordering times, popular menu items, etc you can make informed decisions for your restaurant. 

Not only that, but this data is also a source of information to find areas for operational improvements. These improvements can be applied to managing staff schedules during busy hours or optimizing the whole process of order acceptance to get the food ready to give customers a better experience. 

Optimized Labor 

Third-party delivery service eliminates the need to hire extra staff for delivery. As they handle the order delivery part, your employees can focus on other high-priority tasks like food preparation and customer service. This helps reduce mistakes, the stress of handling phone orders and gives your employees a breathing space. Ultimately it’s all about freeing up your team to do what they do best while the delivery service handles the rest. 

Higher Revenue 

Can a simple partnership really transform your profits? – One of the common questions that restaurant owners have while making big and strategic decisions for their business. The truth is – It did for many restaurants! 

Take Burger King Germany, for example. They needed help with the high costs of hiring and managing in-house drivers for their 750 locations. To keep up with demand, they teamed up with Uber Direct. Not only did this expand their delivery capacity, but it also made the entire operation more profitable by eliminating the need for their own delivery infrastructure. The result – more orders placed and higher profits as they minimized overburdening their team or budget. 

Common Challenges of Using  Third Party Delivery Services

Reading till now, partnering with a third party delivery service can feel like a win-win for restaurants. But like any other collaboration, it comes with its own set of challenges. For example, it’s frustrating to see food cooling down on the counter while a delayed driver leaves your customers waiting. These challenges are common. But there’s good news. Most of these challenges are solvable. 

Let’s break down the common pain points and look at how you can address them effectively below:

Challenge	Description	Possible Approaches
Crowding from nonguests	Delivery drivers often gather in dining areas of restaurants which affects guest comfort.	Create designated pick-up zones or use Pickup Manager software for a streamlined hand-off by providing clear order statuses through a display or QR code.
Lack of control over couriers	Couriers may not handle food properly or represent your brand well.	Provide feedback to delivery platforms or choose services with higher courier training standards.
Last mile issues	Delays or errors during delivery can frustrate customers.	Use GPS tracking tools, improve communication or partner with providers offering route optimization.
High transaction fees	Service fees eat into profits, especially on smaller orders.	Adjust menu prices where necessary, or choose partners whose pricing range goes well with your budget plan.
Overwhelming food orders	Sudden spikes in orders can overwhelm kitchen staff and delay service.	Implement batch cooking for popular items.
Food waiting for the driver’s arrival	Food cools down while waiting for delayed couriers, affecting quality.	Experiment with kitchen timing systems or invest in insulated packaging to retain heat longer.

Table: Challenges of using a Third Party Delivery Services for your restaurant 

Popular third Party Delivery Service Provider for Restaurants

Choosing a third party delivery service can feel like navigating a maze. Which platform offers the best value? Which fits your restaurant’s style? In this section, we’ll walk through five leading options, breaking down what they do and how much they charge, so you can pick the right partner.

DoorDash

DoorDash is one of the largest food delivery services in the USA. It alone holds 65% of the market share along with its subsidiaries in the country. With over 500,000 merchant partners, it’s one of the biggest platforms for food delivery and pickup. Restaurants can showcase their menu, adjust hours, and contact delivery drivers and customers in real time using this third party delivery app.

Key Features

• Customize promotions for specific menu items or the whole store to attract more customers.
• Adjust menu offerings, communicate with drivers, and manage live orders using merchant tools.
• It offers advanced solutions like  AI-assisted phone ordering to QR code-based tableside ordering. 

DoorDash charges commission fees up to 30% for restaurants.

Uber Eats

Uber Eats connects restaurants with a broad customer base through its widely recognized platform. It provides tools to manage orders efficiently and options for flexible pickup and delivery services.

Key Features

• Lets you use in-app ads and promotions to increase your restaurant’s visibility and attract more customers.
• Restaurants are compensated for prepared perishable items, even if an order is canceled or not picked up.
• Gain access to detailed performance reports and customer insights to spot trends and improve your offerings.

Uber Eats typically charges a commission fee ranging from 15%-30% on orders, depending on the services you choose. They also provide flexible pricing plans, letting you customize the partnership to your specific needs.

Grubhub  

Restaurants can grow their sales and connect with new customers through Grubhub. The service uses smart technology that merges well with an existing system. 

Key Features

• Choose from Grubhub’s fleet of professional drivers, self-delivery using your staff, or a hybrid model to expand your delivery range. Pickup options are also available for customers.
• Use targeted advertising and promotions to attract new customers and build loyalty among existing ones using marketing tools. 
• Restaurants receive guidance from a success manager and access to a team of support agents to help ensure smooth operations.

Grubhub’s fees vary depending on the services chosen, with delivery commission rates typically ranging between 5%-20%.

ChowNow

ChowNow offers restaurants a commission-free platform for online orders. With tools designed to streamline direct and third-party ordering, it helps restaurants build customer loyalty and maintain better control over their margins.

 Key Features

• ChowNow charges no commission and allows restaurants to keep more of their earnings while offering unlimited direct ordering through their website and app.
• Access a reliable network of drivers with flat-rate delivery fees for orders within an 8-mile radius, helping to manage costs.
• A dashboard provides insights into sales and performance across all ordering channels to help optimize operations.

ChowNow charges a flat monthly fee starting at $199/month, depending on the plan and services chosen.

delivery.com

delivery.com is a versatile platform that connects users with local businesses, offering a wide range of services beyond just food delivery. Customers can order meals from restaurants, groceries, liquor, and even laundry services through their website or app.

Key Features

• Unlike many competitors, delivery.com supports food, groceries, alcohol, and laundry service orders, giving it a unique edge.
• More than 12,000 businesses partner with delivery.com to expand their reach to new customers.

There is information about how much they charge restaurants and how they charge. You can email them to get a detailed breakdown.

Key Considerations Before Partnering with a Third Party Delivery Services

Now the big decision time – whom to choose? It can feel a little bit overwhelming as it’s not just about adding delivery to your services but it’s also about finding a partner that aligns with your goals, budget, and values. Remember a wrong choice may also hit your brand reputation. 

So before you commit please have a look at the checklist below to know what to consider: 

• Understand how much you will pay per order, your average order amount on a daily or weekly basis, and if it’s sustainable for your margins 

• Make sure the platform you choose delivers in the zones that align with your customer base

• Confirm if the partnered platform can integrate with your existing systems for smooth operations

• Look for flexibility in updating and managing your menu on the platform if your restaurant business often does experiments with menu 

• Search for customer reviews to know about their reputation for on-time deliveries and handling peak hours 

• Check if you can maintain control over how your brand is represented and also how much control you have over there 

• Explore their marketing options and how much exposure you will possibly get by partnering with them 

• Carefully review any contracts for exclusivity clauses or long-term commitments

• Learn about their payment cycles and how quickly you’ll receive funds from orders

• Choose a partner that can support your business as it grows, especially if you plan to expand locations

• Look out for extra charges, like service fees or equipment costs because it’s better to be safe than sorry 

Final Words

Partnering with Third Party Delivery Services can open doors to reach more customers, streamline your restaurant operations, and overall impact your revenue generation. However, not all partnerships are the same, and finding the right fit takes careful thought. I hope this blog helps you weigh the benefits, challenges, and key considerations while you make an informed decision for your business. 

See you in the next blog! 

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