Joined: 21 Aug 2006
Posts: 665
Location: Currambine, Perth, Western Australia
Re: Any small guys considering stopping delivery
What wrote:
Tom,
The cost of delivery has to vary shop to shop. How do you come up with around $5, if i may ask.
How much does it cost you for a pick-up? What
For me Tom was spot on with his cost to deliver.
We pay our drivers $13 per hour plus car allowance of anywhere between $2.50 to $4.00 per delivery drop.
If a driver does a local delivery and it takes 15 minutes then it is $3.25 for the hourly rate plus $2.50 for the car allowance for a total of $5.75. We charge $5.50 for this delivery, thus losing 25 cents on the deal. If they are away longer then the loss is greater. We only recently increased our delivery charges by 50 cents which all went to the drivers.
If someone picks up we get the full tote odds for the pizza as all the costs for staffing are built into the price.
The question is - Why should we get a lesser return on delivery than for shop pick up?
Every thing we cost into our business is for making a profit yet we accept doing deliveries at cost or for a loss. The brick only recently fell out of the sky and hit me on the head about this. Delivery is a service factor that should have a profit return. If we did everything for zilch return then we would be broke in minutes. Taxis, transport companies etc deliver at a profit (even suppliers are building this in aa a fuel surcharge) yet we are in this mentality that we should “provide” this service free, at no profut or at a loss.
I am now at the stage of sooner tahn later for stopping deliveries.
Dave
Pizza Pizzazz - Real Pizzas, Unreal Taste
Are you sure that deliveries give you zilch return? Your above example shows a delivery putting 25 cents less profit in your pocket than the same order as carryout. Is your marginal rate of return really only a quarter? Also consider that your carryout business will now need to carry the complete burden of covering your fixed costs. Are you sure that you can afford your rent, utilities, insurance ect increasing as a percentage of sales. There’s a lot to think about when considering dropping delivery and be sure you analyze the benifits as well as the downfalls completly.