To Delivery, or to Not Deliver

[Yourpizza]

This has come up as well.
Most of the big companies offer delivery and some small pizza shops, don't.

Is it because its a liability?

What are your thoughts on why you would or wouldn't deliver?
What are the pros and cons?

Appreciate it!

Keith

[RoadPizza]

Most of those big companies deliver because their whole company mission is based on the delivery business.

I can see why a small pizza shop wouldn't deliver:
     - They can't afford the overhead of buying a car(s) or motorcycle(s)
     - Delivery is a cutthroat business and people expect low prices and discounts
     - If you don't do it right, you're giving people an excuse to not like you
     - Some pizzerias want to focus on their dine-in guests

[Yourpizza]

Roadpizza

Great comments and perspective on things.

Seems like you need to decide what you're going to be for your consumer and tailor it accordingly.

Makes me wonder how profitable vs the cost angle does it become and is it worth the expedition, if you've never delivered before, to start offering delivery....seems like once you start, you don't want to stop, as the next call for take out and you say no, you could lose a customer forever.

[RoadPizza]

Exactly.  You need to find out what niche you want your restaurant to fill first. 

[dragas]

Roadpizza

Great comments and perspective on things.

Seems like you need to decide what you're going to be for your consumer and tailor it accordingly.

Makes me wonder how profitable vs the cost angle does it become and is it worth the expedition, if you've never delivered before, to start offering delivery....seems like once you start, you don't want to stop, as the next call for take out and you say no, you could lose a customer forever.

My favorite Shop in town stopped delivering. They have since expanded to 3 more shops, all without delivery. New shops come and go in this town, albeit really small. Most who deliver, and the 1 constant is my favorite. I also don't hesitate to pick up. I think your product speaks volumes.

[c0mpl3x]

delivery will cost anywhere from $8-80 an hour, which on a 10 hour day, can be $500+ you never see because you offer delivery.    if your pizza is good enough though, your labor with delivery drivers on payroll, your labor should still be below 25%

[Yourpizza]

Compl3x

Appreciate the feedback.

So, then the larger question is the additional costs, weighed over time, or even a day, will increase enough volume in sales to over compensate for the additional costs in a particular time period. Add in the intangible benefits of potentially reaching a larger customer base and it becomes an interesting metric to trend and follow to determine whether or not your gross sales- labor costs-monthly nut (overhead etc), benefits from delivery.

My sense is its market specific and demographically driven. Add in our instant society and or multi-tasking and the potential impulsiveness of ordering a pie or 2 vs cooking at home or some other activity and it makes for some interesting calculus.

As a function of overall costs, are you suggesting, before or after you roll out delivery, that your labor costs should not exceed 25% of sales?

Thanks~

[RoadPizza]

He's suggesting the 25% labor cost, but YOU need to know your labor cost and food cost INTIMATELY if you're planning to run your own business.

[gabaghool]

Every single operator I know, if he or she stuck with it, reaps benefits from delivery.  After a while, take out remains the same, doesn't go down, nor does the in house dining.  it doesn't make sense to me, but I've seen the numbers.

[olsonmatt]

Apologies if you've already looked at this option, but where I am, there are delivery services in town that will do your deliveries for you.  Basically, the order comes in, we call them, they do the delivery.  There's a $3 charge -- can be passed on to the customer, split with the service, or covered by you.  No liability, or extra employees for you. 

[AimlessRyan]

If I owned a pizzeria, I would prefer not to offer delivery (because I've been a driver and I know it's a crappy job), but I would deliver if I had to deliver. For example, if I opened a pizzeria smaller than 1,500 square feet, I'd almost certainly have to deliver because there wouldn't be any room for a dining room, and carryout alone would certainly not pay the bills. It's not about doing what I want to do; it's about paying the bills.

Most pizzeria owners don't seem to understand this, but you don't always get to do everything how you want to do it. You have to base your business model on supply and demand. You need to supply what your market demands. If I think my pizza is the best thing ever but most of my customers tell me they'll only come back if I put less garlic or basil in the sauce, then I'd start putting less garlic or basil in the sauce. Because it's not about what I want; it's about what my prospective and existing customers want.

The customer is always right. If they want you to deliver, but you don't deliver, they'll order from someone else and you'll go out of business.

[c0mpl3x]

food for thought.   the largest orders i've ever made and/or seen ordered, have been for delivery.

[AimlessRyan]

food for thought.   the largest orders i've ever made and/or seen ordered, have been for delivery.

Very good point. And those orders are also a ticket to lots of new customers if you do things right.