The food ordering process works this way under this model:<\/p>\n
- \n
- Customers put an order on the website\/mobile app first.<\/li>\n
- The restaurant will then collect your order via the app or dashboard.<\/li>\n
- The restaurant will alert the order has been received via an email or an automated phone call.<\/li>\n<\/ul>\n
- \n
- Delivery Process<\/strong><\/li>\n<\/ul>\n
The delivery process has two different possible scenarios.<\/p>\n
- \n
- By the delivery person who is employed by the restaurant.<\/li>\n
- By the delivery person who is employed by the company.<\/li>\n<\/ul>\n
Limitations<\/strong><\/p>\n
Start-ups with this model are limited in terms of price and cuisine in their service offering on request. They are primarily associated with consumers with relatively low-key delivery foods such as burgers, pizza, Chinese, etc. Food startup can\u2019t control and\/or optimize the quality and speed of food delivery services with this model.<\/p>\n
Benefits Of This Model<\/strong><\/p>\n
Online Food delivery companies are not going to have to worry about cooking or shipping this model. Such start-ups tend to charge 10-15 per cent for food delivery services. And, being a pure software company, they have great scale possibilities and remarkable growth.<\/p>\n
BUSINESS MODEL \u2013 2: ORDER & DELIVERY MODEL<\/h3>\n
Order and delivery platforms handle logistics for restaurants, food joints, and home delivery services. A partnership with this these platforms is beneficial for any eatery as they don\u2019t have to search for and pay couriers or maintain vehicles.<\/p>\n
Order and delivery services cut 20 to 30 percent on the cost of each order and may charge a flat delivery fee to customers. UberEats\u00a0went even further: the company offers to make restaurants pop up at the top of search results for a marketing fee.<\/p>\n
![\"Food](\"https:\/\/rubygarage.s3.amazonaws.com\/uploads\/article_image\/file\/1941\/order-and-delivery-model-1x.png\" "\\"How")
<\/figure>\nMain challenge: arranging an efficient delivery system<\/h3>\n
The delivery time matters most for customers. Delivery speed is a key factor of satisfaction for\u00a060 percent of customers. Besides, food must be kept at a consistent temperature to stay fresh and tasty.<\/p>\n
The time factor is especially critical for lunch orders, as working people usually have a limited lunch break. Delivery in under 30 minutes counts as great service. Wait times of one hour or more can upset customers and increase the churn rate.<\/p>\n
Among common delivery types are milk run and point-to-point delivery. Each of the types has its own pluses and minuses.<\/p>\n
Milk run delivery<\/h4>\n
With milk run delivery, a food delivery company has a base of couriers for regular deliveries. The company maps a fixed route for each courier that reaches all delivery points in one run.<\/p>\n
![\"Milk](\"https:\/\/rubygarage.s3.amazonaws.com\/uploads\/article_image\/file\/1944\/milk-run-delivery-1x.png\" "\\"How")
<\/figure>\nStrengths:<\/strong>\u00a0The milk run model helps a food delivery platform reduce operating costs.<\/p>\n
Weakness:<\/strong>\u00a0The milk run model doesn\u2019t work whenever someone requests a different delivery time or wants to make changes to their order.<\/p>\n
Point-to-point delivery<\/h4>\n
With point-to-point delivery, a food delivery service uses a network of standby carriers and assigns a particular order to the carrier closest to the eatery. That carrier takes the food from the pick-up location and delivers it to the drop-off point.<\/p>\n
![\"Point-to-point](\"https:\/\/rubygarage.s3.amazonaws.com\/uploads\/article_image\/file\/1946\/point-to-point-delivery-1x.png\" "\\"How")
<\/figure>\nStrengths:<\/strong>\u00a0With point-to-point delivery, a company is able to provide flexible and efficient delivery services for customers.<\/p>\n
Weakness:\u00a0<\/strong>Sustaining a solid delivery network of motivated couriers takes lots of effort and investment. For example,\u00a0DoorDash\u00a0pays over\u00a0$200 for each carrier\u00a0recruited, and carriers typically stay with the company for only three to six months. To maintain a team of 25,000 carriers, DoorDash has to spend around $5,000,000 every few months.<\/p>\n
#BUSINESS MODEL \u2013 3: FULLY INTEGRATED MODEL<\/h3>\n
Also called the Full Stack Model, here one service provider takes care of the entire food chain.<\/p>\n
Right from preparation to drop-off, this online food delivery business model is unique and warrants a high capital investment.<\/p>\n
To prepare the food, you can further take two different routes:<\/p>\n
- \n
- Set up your own kitchens and hire the entire staff.<\/li>\n
- Hire cloud-kitchens or ghost kitchens. They will prepare the food that will be delivered to the customer under your banner.<\/li>\n<\/ul>\n
However, the food preparation facilities are not open to a dine-in.<\/p>\n
They are only responsible for preparing the food and handing it over to the delivery department.<\/p>\n
In this food delivery business model, you will be responsible for maintaining quality standards.<\/p>\n
Not just in the delivery aspect, but also in the preparation of the food too.<\/p>\n
\n\n\n
\n Pros<\/strong><\/td>\n Cons<\/strong><\/td>\n<\/tr>\n \n Since it combines food delivery with other aspects makes this model a preferred avenue for investors.<\/td>\n The end-user is usually attached to a restaurant name and will tend to order from their favorite eatery.<\/td>\n<\/tr>\n \n You will have full control over the entire supply chain of the orders.<\/td>\n The startup cost of this business model is higher as it goes beyond the food delivery aspect.<\/td>\n<\/tr>\n \n No dine-in means the setup cost of a restaurant will be much less.<\/td>\n Managing the whole network of operations is complex.<\/p>\n Inefficiency in any aspect can lead to low-quality service.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n
Main Challenges to Overcome<\/h4>\n
Cost is one of the biggest challenges in this business.<\/p>\n
Whereas the food delivery and other charges might be at par with others, the food preparation is an added aspect in this model.<\/p>\n
Even if you can cover the cost aspect with funding or bootstrapping, acquiring the customers without a branded restaurant name is not easy.<\/p>\n
People might like to change their food habits occasionally. Still, the basic premise is to try out new recipes, rather than new restaurants.<\/p>\n
Lastly, the food delivery cost is also on the higher end in this business model.<\/p>\n
Maple\u2019s working model succumbed to this bottleneck of\u00a0high courier cost\u00a0and lower profits in food delivery.<\/p>\n
They started losing money on every meal. And soon, the cumulative loss climbed to $9 million.<\/p>\n
How to overcome them?<\/p>\n
Well, getting the required funding depends on your initial investment and your ability to secure funds.<\/p>\n
- \n
- The investor sentiment depends on the potential of your startup that is backed by an\u00a0outstanding pitch.<\/li>\n
- The convergence of all three segments of the online food delivery business model is what interests the investors.<\/li>\n<\/ul>\n
Dahmakan, which has a similar food delivery model, is working in Malaysia. And just recently, it has secured $18 million in Series B funding.<\/p>\n
For getting the customers:<\/p>\n
- \n
- Provide high-quality standards of food.<\/li>\n
- Run effective PR campaigns.<\/li>\n
- Give out discounts and promotional offers.<\/li>\n
- Use social media channels to your benefit.<\/li>\n<\/ul>\n
How to Generate Cash<\/h4>\n
Since the entire management of services and deliveries is under your control, generating revenue from this model is easy.<\/p>\n
More importantly, food delivery resting on a comprehensive model paves the way for a higher profit.<\/p>\n
\n\n\n
\n Monetization<\/strong><\/td>\n Description<\/strong><\/td>\n<\/tr>\n \n Service Charges<\/td>\n Along with the profit earned on food delivery, you can also put an extra service charge in this business model.<\/p>\n This charge can be in the form of priority deliveries or even a subscription for free deliveries.<\/td>\n<\/tr>\n
\n Profit Generation<\/td>\n The potential to scale in such a food delivery business model is huge.<\/p>\n If you are able to market your service with efficiency and use technology to your benefit, it is possible to build a mammoth business.<\/td>\n<\/tr>\n
\n Special Packages<\/td>\n Since you will be taking care of the entire network of operations, it is easier to leverage from high-earning opportunities.<\/p>\n You can take special orders or go for a meal-kit food delivery model.<\/p>\n
Taking orders in high volume from corporates and other businesses is something that you can consider.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n
#BUSINESS MODEL \u2013 4: CLOUD RESTAURANT MODEL<\/h3>\n
Do you want to start your food delivery business from home? Then the cloud restaurant model is the most efficient choice.<\/p>\n
In this food delivery business model you don\u2019t need a restaurant. When a customer places the order, it goes to a central kitchen. The central kitchen will prepare the order and delivery personnel will deliver it.<\/p>\n
In recent years, people who choose this business model got a lot of funding.<\/p>\n
If we compare this business model to the initial two, this business model requires less investment.<\/p>\n
The major advantage is that you are in complete control of the business activities. Hence, you can use the resources as per your needs.<\/p>\n
As you are running the business without any physical presence, you require a seamless app.<\/p>\n
For a perfect app, find a\u00a0food delivery app development\u00a0company with experience in the industry.<\/p>\n
For a competitive edge, you can customize the core services. How is that possible? You will be able to do it as the investment is less.<\/p>\n
Also, you did not invest in real estate. So, you get complete freedom to operate your business.<\/p>\n
#BUSINESS MODEL \u2013 5: MEAL KIT DELIVERY MODEL<\/h3>\n
This is maybe an out of the box food delivery business plan, but it is profitable. You just have to deliver premium quality ingredients to your customers.<\/p>\n
You can give a variety of options in vegetarian and non-vegetarian meals. The customers will have the option to choose the number of recipes they want every week.<\/p>\n
You will deliver recipes and ingredients as per the plans customers choose.<\/p>\n
All of this sounds easy from a bird\u2019s eye view. What about the implementation? First, you will require a team of chefs who can create unique recipes.<\/p>\n
Second, of course, a team of delivery personnel to deliver the meal kits. Third, suppliers that provide premium quality of ingredients.<\/p>\n
Are you forgetting the main ingredient in this whole recipe? Yes, your customers. Your customers will be people who prefer to cook a variety of dishes at their home.<\/p>\n
You can earn high\u00a0revenue in the meal kit food delivery business model. We can say this with a guarantee because customers will subscribe to your services.<\/p>\n
It can be on a monthly or weekly basis. But it is definitely not a single order thing. Talk to your food delivery app development company to see if you can implement the idea.<\/p>\n
CONCLUSION<\/h3>\n
If you are keen to start your own food delivery business, it is imperative that you have a good knowledge base of how the business works.<\/p>\n
Talk to us. Appscrip is an expert in deploying hundreds of successful food delivery businesses around the globe. We have evolved over a period of seven year and perfected the art of delivering a successful food delivery app.<\/p>\n
\n
- Delivery Process<\/strong><\/li>\n<\/ul>\n
![\"Food](\"https:\/\/appscrip.com\/blog\/wp-content\/uploads\/2021\/03\/Food-Delivery-App-Development.jpg\")
<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"