Hey Guys,
We are about to start delivery at one of our locations, and I more or less want to “poll” ya’ll and see what ya’ll charge for delivery fees, etc.
What is your delivery fee? How much of that delivery fee, if any, is given to your drivers? Do your drivers make less than minimum wage while they are on the clock as a driver?
Any and all input would be greatly appreciated. Thank you.
sorry guys, i saw someone posted on this same topic 2 threads before me. thanks.
well, it looks like that kind of turned into a shouting match, though.
sooooooo, once again, any input would be appreciated.
A year ago I dropped my delivery charge. We had added a delivery charge in 2004 and started at 50 cents. The price had gotten up to as high as $1.95 per order. My delivery orders had slipped by a huge amount, and no matter how people spin it was costing me way more to have a delivery charge than it was worth.
I instituted a hard core minimum for delivery and went back to FREE Delivery! My delivery orders are up 35% and over all sales are up 10% vs last year since dropping the delivery fee.
My drivers are making a ton more now too and are not even concerned with high gas prices. We pay 5% “mileage compensation” to them, which averages out to about $1.05 per stop.
I know it is no the norm to offer FREE Delivery these days but I say let my competition keep adding on all those fees and restrictions and I will take all their lost sales to the bank.
Just my opinion
314
Kind of like that airline “BAGS FLY FREE” If you are going to offer free delivery in todays market you need to advertise it and push it. Use it as a point of differentiation. Otherwise, you may as well charge for delivery.
The money still has to be covered in the base food cost somewhere. Minimum or not…314 has to be paying for it somehow. Your market is also a factor. If you are in an area that supports a higher end product it is much easier to hide the delivery expense. Whereas someone trying to compete with $10 pizza’s cannot hide $2-3 in their base cost. It is just easier to charge like the rest.
Well since I compete in the $10 marketplace and the consensus is some kind of Carry Out special as well. I know there is a money involved for the driver but the fact that my average price per delivery order is still over $20 and my average price per carry out order is right around $10 I get extra money already.
My food cost % is much much lower when I deliver food so even if I end up with $3 expense to deliver I still made an extra $7. So adding the extra fee is just not making me money. Since dropping it I have seen my delivery orders increase dramatically and with that my overall profitablity has begun to rise.
If your model is more geared towards dine in or pick up then it is a natural thing to add a fee, but if you are like Big 3 (who is my main competive arena) then it is just a way to advertise even cheaper prices and tack on a fee later.
I’m with Dale on this, I really don’t think the delivery charge puts much, if any more $ in my pocket at the end of the day. We added a delivery charge on Jan 1, 1999 because the other store owners in our franchise wanted to add it. I would have prefered a small price increase but this is what the rest wanted. Now I do realize this coincided with a big downturn in the economy, but until the last few months, I watched my sales consistently drop since. Coincidentally, my ticket average did not rise with the addition of the delivery fee either. Only in the last few months have I seen my ticket average consistently stay above where it was in 2008. The number of orders I do still is still quite down from 2008. Still to this day I find myself regularly having to explain to customers why the $14.99 “deal” they are ordering comes to $16.98(it was even worse when sales tax was higher and the price came in over $17). I’ve heard other owners both from my franchise as well as here on the Think Tank talk about how no one notices the addition or increase of the delivery fee, but in my world they do and I think many have been turned off by it. Just because everyone else charges for it doesn’t mean my customers will stand for me charging for it. There are plenty of alternatives for them to choose from including cooking at home, going out to eat and picking up from the nearest pizza place(which I am probably not the nearest). I’m part of a franchise so I need to follow the rest of the group, but if I was a single unit indy, I would have all of my advertising screaming “FREE DELIVERY” and “If they are the delivery “experts” why are they charging extra for it?”
Hello there,
What is a good minimum order amount to enforce in order to get the free delivery?
Bill
When I offered free delivery I had my minimum order at $15. The way I broke it down was 30% food cost was $4.50 leaving $10.50 to cover all other expenses. I was paying about $4 per delivery as an average cost that left $6.50 for the operational costs which is about as low as i figured I could go.