Third-party or in-house delivery. Pros and cons (2024)

In an era of convenience, restaurant online ordering systems, self-service kiosks, and mobile platforms have become vital to giving customers what they crave: a fast, personalized, and convenient food experience. 

With the number of digital orders on the rise, restaurants should dig into their options regarding takeout, delivery, and other off-premises ordering methods.

But should your restaurant set up a delivery service or use one or multiple third-party delivery platforms like Uber Eats, Glovo, DoorDash, TakeAway.com, or Deliveroo? Let’s compare your options.

Third-party delivery: pros and cons

Pros

• Hiring a third party for your delivery operation can bring you new business, as each platform has its loyal users. This increased visibility can be incredibly convenient for small-size companies, startups, and especially dark kitchens. Moreover, you can work with as many delivery partners as needed to expand your reach considerably.

• Third-party apps offer vast experience, resources, and expertise that your restaurant may not have (yet). Teaming up with an external party means you can scale your business more efficiently. Building on your partner’s experience and following their approach can help your business.

• Outsourcing delivery lets you focus on your core business: preparing delicious food and creating a memorable customer experience. While offering in-house delivery comes with many benefits, it may distract from your end product—which, ultimately, is what your customers will remember you by.

• Partnering with online ordering platforms certainly isn’t free, but it allows you to avoid investments on many fronts. You’ll benefit from a ready-made infrastructure, including a network of couriers and riders, packaging materials, delivery tracking, secure payment methods, etc.

Cons

• Third-party delivery companies are known to charge commission fees. Depending on the business’s size and margins, these fees may not be feasible, even considering the infrastructure and experience you get in return.

• Many restaurant owners fear losing control over the delivery experience. Your business has nothing to say about delivery staff training or how your food will be delivered to your customers.

• If you have a bad delivery experience, your business can be impacted even though you weren’t responsible. And with 80% of customers saying they’ll blame the restaurant, not the delivery service if anything goes wrong, that’s an important consideration.

• Hiring an external delivery service can result in losing communication with your end customer. Maintaining a positive brand awareness and delivering the customer experience you want becomes more difficult as you have no direct line of communication with your diners.

In-house delivery: pros and cons

Pros

• 78% of delivery orders are placed through the restaurant, while only 22% come through third-party delivery services. That means that if your restaurant were to set up a delivery operation of its own, you could potentially reach a vast audience of customers looking to order directly from your restaurant; this is one of the pros of having delivery.

• By not outsourcing delivery, your restaurant can regain control over the entire delivery experience. Today, creating a top-notch experience for the customer is crucial when ordering online food, so keeping the delivery process in-house may be a wise decision. You can look at Dispatch by Deliverect to control your delivery experience without running a logistics company.

• Choosing in-house delivery removes the communication barriers that come with third-party delivery. You’ll be able to stay in touch with your customers throughout their orders, which makes it easier to obtain feedback and implement changes where needed. Don’t forget that a personal communication style can also positively affect the customer’s experience, resulting in repeat business.

• While setting up a delivery operation requires a serious investment, not having to pay commission fees can make it worthwhile in the long run.
  
  Restaurants often adjust online prices to incorporate platform commission fees, which can sometimes keep customers from ordering. By omitting these hefty percentages to be paid to external parties, restaurants can offer lower prices online, making delivery more accessible to (potential) customers.

• Updating your online offering will be much easier if you run your entire delivery operation. A common complaint when working with third-party delivery companies is that adjusting prices and menu items can take a while since changes have to be approved by the delivery platform first.
  
  Having outdated prices up for a week or more is no exception—unless you’re teaming up with Deliverect, which solves this issue by integrating delivery companies into your POS system.

Cons

• Setting up a delivery service requires capital and expertise. You need to purchase a fleet of delivery vehicles, choose a reliable payment system, insure your drivers, and figure out how to track deliveries. The ability to scale your business depends on the amount of capital you have. Not making the best decisions may well cost you more than just money.

• Running your delivery in-house is all about full accountability. You cannot pass the buck to a third-party delivery company whenever something goes wrong. Whereas delivery platforms can offer vouchers relatively quickly to make up for wrong, cold, or messy orders, restaurants must ask themselves how they will handle bad delivery experiences.

• Despite the high number of orders through restaurant apps or websites, not signing up with delivery partners may result in less visibility and potential customers. Your existing clientele may order directly from your app, but how will you expand your reach? Marketing in-house delivery may require a higher investment than joining third-party platforms, bringing you a new pool of customers.

Do what is right for you.

Both third-party and in-house delivery have advantages and drawbacks. Before deciding, weigh the options to determine which type of delivery best suits your business.

Whatever you decide, it's crucial to have as much data on your delivery operation as possible. Working with Deliverect can give you transparency into your sales figures, platform performance, and best sellers to optimize delivery.