Direct Delivery: How to Find Profits in Delivery

Today’s buyer dynamics are shifting and rewriting the rulebook for all parts of commerce, including local business. Since the pandemic, online purchases have increased from 571.2 billion in 2019  to 815.4 billion in 2020, and this trend continues to create ripple effects in the marketplace.  

Savvy business owners are following these trends and reaping the rewards, selling more goods and services online to meet these new customer buying preferences.

Unfortunately, though, selling more products online also means more need for delivery services, and this can be an added expense that cuts into business profits.

This guide helps you find delivery options for your business that can help you satisfy customer demand without loosing money from high delivery costs and commissions.

It covers the following:

By the guide’s end, you’ll better understand modern delivery operations and some of its most important technologies. You’ll also be better equipped to know how to create and operate a winning delivery strategy so your business can thrive online.

What today’s buyers expect from local business

The landscape of commerce has undergone a significant transformation in recent years, and nowhere is this more evident than in the expectations of today's buyers from local businesses.

The global e-commerce market, valued at approximately $6.3 trillion, has become a powerhouse, representing around 20% of all retail sales worldwide.

This seismic shift in consumer behavior has been driven by a quest for convenience and efficiency, particularly among younger consumers.

The Pandemic-Induced Shift

One pivotal moment in this transformation was the onset of the COVID-19 pandemic. Lockdowns and social distancing measures forced consumers to reconsider their shopping habits.

The fear of crowded stores and restaurants, coupled with the convenience of online shopping, led to a surge in e-commerce adoption. This shift was initially driven by necessity but has since evolved into a lasting preference for many buyers.

The New Norm: Buying Online

Today's buyers expect local businesses to offer robust online shopping experiences. They want the ease of browsing a store's catalog, placing orders, and receiving deliveries at their doorstep. Here are some key aspects of what buyers now expect:

Multichannel Accessibility: Modern buyers expect local businesses to offer various channels for placing orders. Whether it's through websites, branded mobile apps, social media platforms, or search engines, the convenience of ordering from any place has become paramount in today's shopping experience for busy buyers.

Delivery and Pickup Dominance: The preference for delivery and pickup options over in-store dining or shopping has become a prevailing trend. US consumers increasingly opt for the convenience of having their orders brought to their doorstep or ready for pickup at the local establishment.

Routine Food and Grocery Delivery: Ordering familiar food and grocery items for delivery has become a weekly habit for many Americans. This trend is marked by increased repeat orders as customers seek comfort and convenience in their favorite local dishes.

Generational Shift: A notable generational change is underway. Generation Z, the digital natives, is twice as likely to embrace delivery services compared to baby boomers. As the younger generation takes the reins of consumer behavior, local businesses must adapt to cater to their preferences.

Cost-Consciousness: Despite the convenience of online ordering, cost remains a crucial factor for customers. Low-cost delivery options, often coupled with coupons and discounts, continue to influence buying decisions significantly. Businesses that offer competitive delivery pricing can gain a competitive edge.

As you can see from the above, delivery is central to the shifting trends of online purchases. If a business can get its delivery program right and effectively market itself online, it will be more attractive to new buyers who value the convenience and cost-effectiveness of this new buying environment.

There is no way around it: If you’re selling online, you’re going to have to look at your business's options when it comes to delivery.

Navigating Delivery Options for Online Businesses

As you develop your online business, it's crucial to understand the delivery options at your disposal. Here, we'll delve into two prevalent methods that can boost your e-commerce growth.

Leveraging Third-Party Delivery Platforms

Popular online delivery platforms, such as Ubereats and DoorDash, can help introduce your products to a broader customer base. These services offer a great opportunity, but they also take a commission of 20-30%, which can significantly impact your overall profits given the low margin in the restaurant business.

Even though their undeniable reach makes them a valuable asset in a digital-first business landscape, relying too heavily on these platforms can mean surrendering control over customer service, delivery timelines, driver reliability, and even branding.  

Incorporating a Direct Delivery System

To strike a balance between cost and customer reach, consider building your own direct delivery system alongside these third-party delivery apps.

A direct delivery system means you take delivery orders directly from customers via any channel like your online ordering, phone orders or even social media ordering. Then you use your own drivers or commission-free 3rd party delivery services to fulfill them.

Most of the delivery fees are covered by the customers, so there is little to nothing to additional cost for offering direct deliveries.

Direct delivery, free from commissions, can significantly enhance profit margins. Benefits include cost management, driver oversight, and an enriched customer experience.

As you'll discover, modern applications like Shipday can seamlessly automate your direct delivery operations, offering benefits like automatically sending orders to your  direct delivery drivers via a modern driver app or sending to available 3rd party delivery services. They can find you the best driver for each order in real-time from a large pool of drivers.

In the last section of this guide, we’ll show you how you can use Shipday to help you better manage your direct delivery and third-party delivery operations together.

But first, it's essential that you evaluate the prerequisites for establishing your own direct delivery program.

What you need to know to set up your direct delivery operation

The path to establishing a seamless direct delivery operation is paved with intricate decisions and crucial steps. From technological integrations and delivery zone mapping to ensuring a flawless customer experience, setting up an effective direct delivery service requires some basic planning and execution.

Evaluating the Prerequisites

In general, there are three main categories businesses need to consider when setting up an direct delivery operation:

Technology Infrastructure

  • Ordering System: It's crucial to have a reliable online ordering mechanism. With the rise in mobile users, investing in mobile-responsive platforms or dedicated applications becomes even more essential.
  • Payment Processing: Choose a seamless payment gateway that provides a smooth transaction experience. This ensures that the payment process is not a deterrent for your customers.
  • Tracking and Updates: Implement a real-time delivery management system, offering customers transparency and enhancing their overall experience.

Financial Considerations

  • Setup Costs: While you save on third-party commissions with direct delivery, there some initial expenses to set up the direct delivery system. These include technology setup, acquiring delivery vehicles, and hiring drivers if you want to have any direct delivery capacity. Otherwise, you can use 3rd party delivery services like DoorDash Drive and Uber Direct.

  • Ongoing Costs for direct delivery: Consider recurring expenses such as vehicle maintenance, fuel, and driver salaries. It's also vital to have a contingency fund for unforeseen challenges or expansions.

  • Revenue Management: Use efficient tools and platforms that facilitate the smooth collection and transfer of payments to relevant stakeholders, ensuring financial fluidity.

Regulatory Compliance

Regulatory compliances are more relevant if you decide to use your own drivers. If you are only using 3rd party delivery services for delivery, you may not need to worry about this.

  • Permits and Licenses: Different regions have specific requirements for delivery services. Ensure you obtain all necessary permits, especially if you are using your own drivers or delivering alcohol.

  • Insurance: Protect your business, vehicles, drivers, and goods in transit with comprehensive insurance coverage. This not only provides a safety net for unforeseen incidents but also instills trust in your customers.

  • Employee Rights: Be well-versed with labor laws and ensure that drivers and other staff members receive fair wages, benefits, and safe working conditions. Familiarize yourself with the tax obligations associated with hiring, and ensure timely delivery of necessary forms.

6 Tips for Success for effective online delivery sales

Those prerequisites give an outline of the basic infrastructure you’re going to want to have in place and once you’ve created that, your business should be ready to start delivering.

Use the following tactics to successfully implement your direct delivery program:

  1. Embrace Direct Ordering: Make online ordering user-friendly. Consider developing an app tailored to your business for better brand presence.

  1. Boost Online Presence: Set up profiles on prominent search engines and social media platforms. This amplifies your reach and improves visibility.

  1. Monitor Online Reviews: Online reputation can make or break a business. Especially focus on Google reviews as they directly influence search rankings.

  1. Subsidize Delivery Fees: Offer discounts or reduced delivery fees for direct orders to encourage customers to order directly from your platform.

  1. Open Channels for Communication: Ensure customers can easily reach out for support, inquiries, or feedback. This fosters trust and aids in swift conflict resolution.

  1. Encourage Instant Feedback: Post-delivery reviews help in continuous service improvement. Create mechanisms for customers to easily share their feedback.

Considering technology platforms for delivery operations

Choosing the software for direct delivery operations is also a tactical decision. The right technology can shape customer satisfaction, operational efficiency, and profitability.

Map out the specific needs of your business. Understanding your requirements when it comes to software is the first step in ensuring that the chosen software aligns with your operational goals.

Simple, user-friendly dashboards ensure a smoother transition for your team and faster adoption rates. The software should also be scalable to adapt to increasing demands without requiring a complete overhaul, and it should seamlessly integrate with other systems, such as inventory management, CRM, or payment platforms.

Types of Software used for direct delivery deliveries

Here's a rundown of some of the software categories you may need for setting up an direct delivery operation:

Online Ordering Systems: Establishing an online presence is the first step for direct delivery. Platforms like Gloria Foods, ChowNow can be great for easy direct ordering. Or, you can adopt more comprehensive systems with mobile apps, rewards, etc. with providers like Incentivio, Lunchbox, olo and others.

Point Of Sale (POS) Systems: POS systems, like Toast POS, serve as the nerve center of a restaurant's operations, handling inventory management, order processing, and customer interactions​. They also offer native online ordering systems like Toast online ordering.

Delivery Management Software: Software like Shipday helps manage local deliveries efficiently by offering features like automated hybrid delivery assignment, real-time branded delivery tracking, SMS notifications and instant reviews​. Shipday is also crucial for optimizing delivery routes and ensuring timely deliveries​.

Integrating platforms for optimized delivery operations

As businesses, move towards optimizing their operations, seamless software integrations are key:

Key Elements of Successful Integration

Successful direct delivery operations don't just happen by chance. They are the result of meticulous planning and the integration of various software systems.

In crafting a successful software integration, several essential elements come to the forefront. Online Ordering Systems act as the foundational gateway, capturing customer requests and marking the inception of the delivery process.

Delivery Management plays a crucial role in streamlining routing, overseeing delivery personnel, and ensuring that deliveries are executed in a timely fashion. This system is also pivotal in charting out the most efficient routes, thereby conserving time and fuel.

When these elements cohesively intertwine, the result is an integration that promises seamless workflows, real-time tracking from order receipt to delivery, and rapid order dispatch.

Practical Implementation: A Closer Look at Shipday and Toast POS

Using the integration of Shipday with Toast POS as an example, businesses can see firsthand the operational efficiencies that can be achieved. With a simple API key, delivery orders from Toast POS are instantly transferred to the Shipday dashboard, minimizing any manual interventions and potential errors.

This ensures:

  • Quick order recognition and processing.
  • Efficient allocation of delivery personnel.
  • Real-time order tracking, improving customer trust and satisfaction.

Steps to Integrate Your Platforms

By understanding the importance of platform integration and implementing it effectively, businesses can ensure they remain efficient, responsive, and ahead of the curve. Here are some basic steps to integrating delivery platforms:

Step 1: Get API Access. For example, if you want to integrate Shipday and Toast POS, ensure you have access to their API documentation.

Step 2: Test your integrations. Before going live, always test the integration in a sandbox environment to iron out any kinks.

Step 3: Go Live. Once satisfied, deploy the integration in a live environment.

Step 4: Monitor Regularly. Even after successful integration, continuously monitor for any discrepancies or issues.

Step 5: Stay Updated. Software platforms frequently update their APIs. Ensure you're always using the latest version to avoid disruptions.

Step 6: Seek Expertise. If unsure, always consult with an expert or the software provider for guidance.

Integration of platforms is paramount for your business to stay agile, adaptive, and competitive. Staying current with software updates and seeking expert advice further solidifies the integrity and functionality of these integrations.

Shipday

Shipday is an all-in-one local delivery software tailored for small businesses such as restaurants, groceries, and ghost kitchens. It’s  a streamlined solution to manage local deliveries, enabling businesses to optimize their delivery processes and improve efficiency. Shipday’s software is user-friendly and can be set up quickly, allowing businesses to start using it in less than 15 minutes.

Our features

Businesses need efficient and reliable solutions for local deliveries. Shipday offers a plethora of features tailored to meet the demands of modern businesses. Here is a list of some of our best features:

Shipday offers an intuitive interface with user-friendly mobile apps and dashboard, enabling businesses to efficiently dispatch orders and track drivers in real time. It also provides flexible delivery options, catering to businesses with their own drivers or those using third-party services like DoorDash and Uber.

With seamless  integrations, orders from your online ordering are automatically sent to Shipday, supporting both single and multi source setups. For more integrations, see our integration page.

Shipday's versatility extends to a wide range of delivery services, evolving based on user feedback. At its heart, Shipday aims to simplify local deliveries, trusted by thousands globally.

In essence, Shipday is a holistic solution for local delivery needs, ensuring efficiency and growth. It ensures efficiency, transparency, and growth in the realm of local deliveries.

For more information, contact us, and we’ll help guide you through how to easily set up your delivery operations with Shipday.

Conclusion: Are you ready for delivery 2.0?

Combining features of third-party delivery and direct delivery to create a multi-channel delivery experience just makes sense for smart business owners wanting to succeed in the online marketplace. Customers want the convenience of online ordering and delivery services that deliver products right to their door. Businesses need to adapt to this new paradigm.

Shipday stands at the forefront of delivery software, helping businesses navigate cost-effective solutions to getting their product to their customers’ doors. We have a whole slew of features, including driver tracking, route optimization, and seamless integration with all kinds of other software businesses use for their online businesses.

Try Shipday for free, and see what difference our software can make for your delivery operation.

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