The True Cost of Restaurant & Retail Deliveries
The Age of COVID-19.
We are certainly living in interesting times, aren’t we?
Because of wise and cautious governmental restrictions on large gatherings of people, traditional sit-down dining hasn’t been possible recently. Even as restrictions are gradually loosened, on-premise dining will not be the same for the foreseeable future. Wanting to support our favorite local businesses, many of us — the owners of Piper’s included — are ordering more food for pickup and even delivery to our homes.
Here’s a painful fact about deliveries that you may not know. Unless a restaurant is big enough, or part of a national chain, it isn’t always profitable or sustainable to pivot to a model that relies on increased delivery sales. This is because of one simple fact.
Having items delivered to our homes is unavoidably expensive, and someone must bear the cost of this convenience!
Big, national, third-party delivery services — like UberEats, Grubhub, Postmates and DoorDash — cost restaurants and retail shops a lot of money. How much money, you may ask? For most of us 30% of the total order is their normal commission fee. This 30% is paid for each order, and is collected by the big, national, third-party delivery services IN ADDITION to any delivery fees they might charge you, the customer. Hopefully, you can rely on the fact that your delivery driver is getting 100% of the tips you specify, as well as a living hourly wage. But that is not always the case, either, a fact you already know if you read the news.
Restaurants and retail shops already exist on razor-thin profit margins. An off-the-top cut of 30% of each sale that is delivered rather than picked up usually means that most (if not all) of that profit is erased FOR EACH DELIVERY ORDER. Usually, businesses have to offset that somewhat by increasing the prices of our items that are ordered through these big, national, third-party delivery services. Since these services don’t allow businesses to add flat delivery service charges, they are left with one option — increasing prices for each item offered.
Sure, that “great offer” of FREE DELIVERY is tempting and seems like an amazing deal. But it is not a deal at all — unless you are the owner of a big, national, third-party delivery service. They laugh all the way to the bank, because so many more delivery orders are being placed right now. And, since they are still charging restaurants the same 30% commissions, they are making more money even after they offer you “free” delivery. Extortion, it seems, does pay for those who are able to do it legally.
Why are we telling you this? Well, we know (because you’ve told us so) that you want to support local restaurants and retailers. And believe us when we say that we appreciate this fact more than you realize. However, we’d like you to keep a few things in mind for the next time you order takeout/delivery food and products.
* If the option is available, pickup your order.
Picking up your order represents the least cost to us all, even if it might be a little more work on your part. Remember to place pickup orders either over the phone, or by using our business web sites. Don’t ever place pickup orders using the big, national, third-party delivery apps and websites. They charge for these pickup orders, too, even though they do absolutely none of the work.
* If an “in-house” delivery option is available, use it.
Yes, that delivery service probably comes with a nominal delivery fee. But you can be confident that this fee is used to cover the actual costs associated with deliveries and is not use to fatten the bank accounts of the big, national, third-party delivery services. Also, you can be confident that any tips you might add are 100% passed on to delivery drivers. Piper’s, for example, has this option. Yes we contract with a third party currently to do our “in-house” deliveries. But in this case we pay this third-party a flat fee per delivery. Part of that fee we add to your order. But even after paying the remainder of that delivery fee and paying your driver 100% of the tip you add on, we still actually make a little money off of each delivery order placed directly through us, more than we would for orders placed through the big, national, third-party delivery services.
* If you do decide that you simply must use one of the big, national, third-party delivery services...
please don’t complain about the higher prices. There is no such thing as a free delivery lunch, no matter what the big, national, third-party delivery services tell you. They are engaging in #FakeMarketing, #MisleadingAdvertising and #GreedDisguisedAsAltruism. Delivery food is the most expensive food option there is, and it should be used sparingly. When it is used, it should be used with eyes-wide-open to the fact that it is going to cost more for everyone, and that this IS the way it should be.
In the meantime, we encourage you to be smart as you continue to support local restaurants and retailers. #ThinkBeforeYouClick, especially before you click on that big, national, third-party delivery service’s app or web site.
Supporting local is more than just buying local. Even with the best of intentions on our parts, if most of the money is going to a big, national, third-party delivery service based in California, attempts at supporting local can end up doing exactly the opposite.
If you are in doubt about how to best support your favorite local restaurants when placing your next delivery/pickup order, call them directly.
They’ll be grateful, and ultimately so will you.
We are certainly living in interesting times, aren’t we?
Because of wise and cautious governmental restrictions on large gatherings of people, traditional sit-down dining hasn’t been possible recently. Even as restrictions are gradually loosened, on-premise dining will not be the same for the foreseeable future. Wanting to support our favorite local businesses, many of us — the owners of Piper’s included — are ordering more food for pickup and even delivery to our homes.
Here’s a painful fact about deliveries that you may not know. Unless a restaurant is big enough, or part of a national chain, it isn’t always profitable or sustainable to pivot to a model that relies on increased delivery sales. This is because of one simple fact.
Having items delivered to our homes is unavoidably expensive, and someone must bear the cost of this convenience!
Big, national, third-party delivery services — like UberEats, Grubhub, Postmates and DoorDash — cost restaurants and retail shops a lot of money. How much money, you may ask? For most of us 30% of the total order is their normal commission fee. This 30% is paid for each order, and is collected by the big, national, third-party delivery services IN ADDITION to any delivery fees they might charge you, the customer. Hopefully, you can rely on the fact that your delivery driver is getting 100% of the tips you specify, as well as a living hourly wage. But that is not always the case, either, a fact you already know if you read the news.
Restaurants and retail shops already exist on razor-thin profit margins. An off-the-top cut of 30% of each sale that is delivered rather than picked up usually means that most (if not all) of that profit is erased FOR EACH DELIVERY ORDER. Usually, businesses have to offset that somewhat by increasing the prices of our items that are ordered through these big, national, third-party delivery services. Since these services don’t allow businesses to add flat delivery service charges, they are left with one option — increasing prices for each item offered.
Sure, that “great offer” of FREE DELIVERY is tempting and seems like an amazing deal. But it is not a deal at all — unless you are the owner of a big, national, third-party delivery service. They laugh all the way to the bank, because so many more delivery orders are being placed right now. And, since they are still charging restaurants the same 30% commissions, they are making more money even after they offer you “free” delivery. Extortion, it seems, does pay for those who are able to do it legally.
Why are we telling you this? Well, we know (because you’ve told us so) that you want to support local restaurants and retailers. And believe us when we say that we appreciate this fact more than you realize. However, we’d like you to keep a few things in mind for the next time you order takeout/delivery food and products.
* If the option is available, pickup your order.
Picking up your order represents the least cost to us all, even if it might be a little more work on your part. Remember to place pickup orders either over the phone, or by using our business web sites. Don’t ever place pickup orders using the big, national, third-party delivery apps and websites. They charge for these pickup orders, too, even though they do absolutely none of the work.
* If an “in-house” delivery option is available, use it.
Yes, that delivery service probably comes with a nominal delivery fee. But you can be confident that this fee is used to cover the actual costs associated with deliveries and is not use to fatten the bank accounts of the big, national, third-party delivery services. Also, you can be confident that any tips you might add are 100% passed on to delivery drivers. Piper’s, for example, has this option. Yes we contract with a third party currently to do our “in-house” deliveries. But in this case we pay this third-party a flat fee per delivery. Part of that fee we add to your order. But even after paying the remainder of that delivery fee and paying your driver 100% of the tip you add on, we still actually make a little money off of each delivery order placed directly through us, more than we would for orders placed through the big, national, third-party delivery services.
* If you do decide that you simply must use one of the big, national, third-party delivery services...
please don’t complain about the higher prices. There is no such thing as a free delivery lunch, no matter what the big, national, third-party delivery services tell you. They are engaging in #FakeMarketing, #MisleadingAdvertising and #GreedDisguisedAsAltruism. Delivery food is the most expensive food option there is, and it should be used sparingly. When it is used, it should be used with eyes-wide-open to the fact that it is going to cost more for everyone, and that this IS the way it should be.
In the meantime, we encourage you to be smart as you continue to support local restaurants and retailers. #ThinkBeforeYouClick, especially before you click on that big, national, third-party delivery service’s app or web site.
Supporting local is more than just buying local. Even with the best of intentions on our parts, if most of the money is going to a big, national, third-party delivery service based in California, attempts at supporting local can end up doing exactly the opposite.
If you are in doubt about how to best support your favorite local restaurants when placing your next delivery/pickup order, call them directly.
They’ll be grateful, and ultimately so will you.
PS...
The owners of Piper’s Cafe are exploring the possibility of creating a Covington-based, Covington-staffed and Covington-supported delivery option to make available to all Covington-based businesses that need it. Plans for this will take a while, especially in the current environment. However if these plans work out, this new business will offer delivery for fees that represent the true cost of that delivery, which will support not only the delivery service but the people who perform it. The goal is to keep the money in Covington by engaging the services of other Covington-based businesses (marketing companies, for example), paying office staff and drivers a living wage, contributing to state and local business tax coffers and supporting Covington-based businesses by offering them a reasonable alternative to the big, national, third-party delivery extortionists.
The owners of Piper’s Cafe are exploring the possibility of creating a Covington-based, Covington-staffed and Covington-supported delivery option to make available to all Covington-based businesses that need it. Plans for this will take a while, especially in the current environment. However if these plans work out, this new business will offer delivery for fees that represent the true cost of that delivery, which will support not only the delivery service but the people who perform it. The goal is to keep the money in Covington by engaging the services of other Covington-based businesses (marketing companies, for example), paying office staff and drivers a living wage, contributing to state and local business tax coffers and supporting Covington-based businesses by offering them a reasonable alternative to the big, national, third-party delivery extortionists.