The gig work industry is skyrocketing, and third-party delivery services are a massive part of this sector. This type of service was already gaining ground before COVID-19.
Since the pandemic shut down the world as we knew it, though, these delivery services have become an integral part of daily life in many households.
For some businesses, using third-party services was the only thing that kept them afloat while entire countries were locked down.
Now, savvy business owners know that if a customer has to choose between heading to the store to pick up an item or having it delivered, they’re likely to go with the second option. And those owners are partnering with third-party delivery services to get more consumer business.
What’s a third-party deliverer, and should you consider outsourcing to them for your goods and service? Here’s everything you need to know about how to partner with a third-party delivery service.
What Does Third-Party Delivery Involve?
Operating a delivery service as part of your business can be a costly investment that doesn’t always pay off. On top of paying for employees, you also must cover their auto insurance’s commercial policy. Then, add on the cost of additional insurance for workers’ comp and other essentials, and unless you’re a big chain, delivery rarely pays off for the small shops.
Third-party delivery services make it possible for smaller businesses to compete with chains by getting in front of potential customers and filling a need. Rather than pay the costs of an in-house delivery driver themselves, the owners partner with the outside deliverers.
The cost of outsourcing is negligible when the additional customer load is taken into consideration. The third-party delivery service does the middle-work, letting the business focus on filling customer orders.
Delivery Services You’ve Seen Everywhere
By now, you’ve seen examples of these third-party delivery services in action all over the place. They’re in grocery stores, gas stations, and restaurants. You can even have a delivery service bring you alcohol and your clothing order.
Businesses retain third parties to keep up with consumer demand without paying for extra staff or delivery costs. Each company charges the business a delivery fee, which is most often a flat rate. Some businesses recoup that fee by charging it to the customer.
Some prime examples of the top third-party delivery services in the country include:
- DoorDash, the go-to company for restaurant and fast-food orders, but they’re now included grocery and convenience store delivery, too. The downside of DoorDash is they often charge up to 25% per order.
- GrubHub works similarly to DoorDash, but only charges 3.05% plus a small processing fee and a 10% delivery fee.
- Postmates/Uber Eats have combined forces to become one of the top delivery services in the country. Their fees are based on commission and sales tax. Uber charges a $350 processing fee to partner with them, and commission can be a hefty 20-30%.
- Instacart has made its name as a grocery and alcohol delivery service. Other grocery delivery services have tried to copy the model, like Walmart, but Instacart still remains in the lead.
- Shipt is one of the newest companies on the third-party delivery service roster. They’re owned by Target, but they deliver a wide range of products and make it easy to ship your goods across the country.
Keeping the delivery fees, processing and set up costs, and commissions in mind, it’s up to you as the business owner to decide if you want to hire a delivery service. Check into third-party delivery experts to get the exact costs for partnering with certain companies in your state.
Why You Should Consider Partnering With At Least One Delivery Service
Even with the costs involved, many stores and restaurants are still on board with using third-party delivery services. What’s the catch?
The reality is that there is power in numbers and visibility. Customers who didn’t know you existed are more likely to order from you if your shop shows up on their favorite delivery services’ dashboard.
If you’re looking to reach new customers and bring in repeat business, this is a profitable way to do it. Instead of digging into your marketing budget and investing in social media or a newspaper ad, consider the expense of using a delivery service as a form of advertising.
You’ll Increase Profits, Too
It’s also a common human behavior to want to get more for their money. If they’re paying a delivery fee anyway, they’ll frequently add more to their cart than they would have in an in-person order.
The third-party apps make it easy to upsell, too. Instead of ordering a pizza, for instance, the app can offer suggestions. Do you want to add an appetizer or a side? A drink? How about what you ordered last time?
It’s user-friendly, and customers appreciate that. If it’s a simple click of the button, they’ll be more likely to add items.
Customers are also familiar with businesses increasing their online costs. A consumer willing to pay extra to avoid leaving the house isn’t going to love the boosted prices, but they’ll probably pay them anyway.
It’s a normal part of online retail now, so they have become used to the bigger price tags. And a small increase can add a buffer to your costs to the delivery service.
Ready to Sign Up? Here’s What You Need To Do
Instead of going website by website to each potential third-party delivery service, look for an all-in-one site that shows you your options, benefits, and fees. Learn how to make an account and find out if the payment software you use currently is compatible with the delivery service.
You have full discretion over what items you post on your profile. Add everything, or stick with a few crowd favorites and customize them to catch the user’s eye.
From there, it’s a simple process of choosing your payment options and optimizing your profile. Once the customers see your business is active on their favorite delivery platform, the orders will start rolling in. The rest is in your expert staff’s capable hands.