The Pros and Cons of Outsourcing Your Delivery Services

With the COVID-19 pandemic raging on, an increasing number of people are turning to takeout and delivery services for their meals. This has led to rapid growth in the food delivery industry, with businesses eager to get a piece of the pie. 

With 42.3% of consumers still choosing takeout over eating out, restaurants and grocery providers are eager to get online quickly. The industry is growing at a rapid rate and bringing in large profits. Covid-19 doubled the total revenue of the top four third-party delivery businesses to reach $5.5 billion in 2020-22.

However, is it advantageous for grocery store owners to outsource their delivery services? In this article, we will explore the pros and cons of outsourcing your delivery services and help you decide whether or not it’s right for your business.

The Cons

Don’t put all your eggs in one basket

Third-party deliveries can lock you into only using one delivery service, restricting your financial flexibility. There is also a tendency among them to keep purchasing data to themselves which means your sales made on their platforms are mere referrals, not your customers.

All the cogs must work together

Third-party delivery platforms may have a large customer database—but when and how your services or restaurant become visible to these customers is not in your hands. If your delivery team and operations department doesn’t share the same goals or don’t communicate with each other, and you’re focusing all your attention on e-commerce and attracting online customers, it’s likely that the inventory is not going to match the demand.

Stock management and planning are necessary to ensure you are prepared for all your new and existing customers (whether wholesale, local, or shipments). This becomes difficult if you do not have full access to your data or sufficient communication with your external partners.

Check the small print

Ensure your delivery service is equipped to handle large volumes. When you look to scale to new geographical locations, you don’t want to be hit with extortionate fees and slow feature updates. This is a common problem when businesses try to launch quickly and use small coding fixes to integrate elements of their data that do not translate well at scale.

The Pros

If you chose to outsource the right functions to third parties, align your objectives, and plan ahead, there can also be many advantages.

Scale at your pace

Start by putting your most popular items online and go from there. Make sure you set aside the inventory you plan to promote on your e-commerce platform so you can still cater to your existing customers in-store or at your restaurant. Partnering with delivery providers like Local Express gives you the knowledge and insights to support a successful allocation of resources (across all stakeholders and departments) and manage your inventory profitably. This is possible by building an e-commerce platform where you can manage teammates and permissions and communicate in real-time.

By budgeting to scale, you can release funding as the new business hits set targets. This supports sustainable sales growth by enabling you to measure your ability to reach goals in specific timeframes. Having funds set aside and taking a step-by-step approach will allow you to understand your capabilities and where to adjust processes from the beginning, in turn supporting a more stable development of your proposition.

Convenience comes first

With a network of existing local drivers with area knowledge, you can save time, energy, and money without the need to hire in-house food delivery teams. Having a team of experts who develop bespoke delivery platforms means you can have an online store, unique to your brand, in a few easy steps and with low barriers to entry. This way, you own your own data, and your e-commerce and delivery information is automatically synchronized to show accurate reports in real time. Using providers that are set up, especially for your delivery business will reduce the risk of complications further down the line as you can benefit from best practices and industry insights gained through experience. 

Marketing with insight

Working with an e-commerce platform provider that supports marketing management, POS, and delivery, can help you to successfully operate your digital store even after you get online. Integrating your data in one place seamlessly means you can increase your marketing efforts according to your sales figures; alongside a team of professionals who can guide you, every step of the way. 

Looking out for platforms that communicate with the key stakeholders in your restaurant or grocery store is important if you expect coherent internal cohesion. The more you can automate when moving into a new field, the less room for manual errors and the more accurate your data will be. While using existing third-party services can provide expert knowledge and an existing customer base, working with professionals who have your interests in mind, with a goal to see your business grow (and not their pre-existing delivery app), means you can own your own data and nurture your customers effectively. 

Are you ready to grow your business online?