further deliveries - higher del. charge or higher minimum ?

[Dmitri]

Guys, i need help on this one - most of us deliver, and it all of us not happy to receive 10 dollar order to be delivered say x miles away, which would take say 35 minutes of drivers time, but we do take deliveries far away hoping it’s going to be a good order. my menu company guy suggested that i put on a menu smth like - del. up to 1 mi. - delivery charge 1 dollar, 1-2 miles - 2 dollars, 2-4 miles - 3 dollars, and that’s what some of local pizza shops do, but my concern is - i still dont want to deliver a 10 dollar order that is more than 2-3 miles away (10 dollars is minimum at my store, 1 dollar standard del. charge), even if i charge 3 dollar delivery charge, as this way nobody is happy - i didn’t get a good order, driver left for a long time for one delivery and he probably wont get a decent tip, customer not happy to pay 3 dollars del. charge. So why not me instead of raising delivery charge according to distance, but instead have higher minimum order needed if the delivery is over lets say 2-3 miles, so my menu would say smth like - we deliver! (1 dollar delivery charge, 10 dollars minimum for deliveries under 2 miles, 17 dollars minimum for 2-4 miles, 25 minimum for 4-6 miles). To me this system makes more sence, much more sence, but i never saw it used by other pizza stores. What do u guys think? am i not understanding smth? I would rather be upfront with the customer, so this way i am happy, because i have a decent sale and if customer really likes our food - i am sure he can get the ticket up, driver happy - he’ll get a good tip, rather then low ticket- low tip- lots of gas wasted- driver gone forever combination.

 

[Daddio]

Re: further deliveries - higher del. charge or higher minimu

Your idea has merit but you will need to have this set up in your POS or have a real sharp person answering the phones. I have a tough time just getting the people on the phones to take the deliveries with a correct address and phone number let alone getting them to use a graduated minimum delivery order.

 

[wa_dave]

Re: further deliveries - higher del. charge or higher minimu

Dmitri

I know our markets are somewhat different but we have a minimum order for delivery of $15 plus a delivery fee by zone - Z1 @ $5 (driver gets $2), Z2 @ $6 (driver gets $2.50) and Z3 @ $7.50 (driver gets $3.50).

If we are short on drivers we don’t deliver to Z3 or some outer areas of Z2 as these take the drivers away for too long and the majority of the time we only get 1 delivery to these areas. We can only do what we can manage and if it means the closer customers get deliveries because we can do more and quicker then so be it. Not arrogance but just the plain economics of getting the most out of the resources available.

The drivers still get some tips - normally around $20 - $30 on a busy night which is OK for Australia - plus they get their $10 per hour.

Our main concern (the pizza industry in general) is the inability to get drivers. Dominos have been placing half page adverts @ $1,200 per pop in the two free weekly community newspapers for the past 5 weeks and still can’t get drivers and general staff.

As an outsider to your market, I see a delivery monster that has been created in the US - not only restricted to the pizza market. Now with rising costs and wages and the difficulty to get staff it is becoming more difficult to supply a delivery service at a minimal or no charge as in the past.

For mine I would put in place a delivery price based on distance zones and price accordingly to how long the driver will be away based on their hourly rate. The further they are away the more they customer pays.

Hey, the price of fuel is getting ridiculous now and as it gets higher the more people will want to get it delivered because they don’t want to spend their money driving down to pick up.

Maybe it is time to start getting out of the service for nothing syndrome and start charging a fair and reasonable fee for services rendered. If your product is good enough and your service strong then you will survive after, maybe, an intital backlash.

Customers have to learn that they don’t work for nothing so why should they expect their pizza store to deliver for nothing, or next to. What ever hapened to a fair days pay for a fair days work?

I know this post may get up some peoples noses but I,m putting my “1.25 cents” worth in (my opinions not as valued as j_r0kk’s 2 cents ) as I really feel that delivery has become a monster and a drain on our profitability.

Viva the pay for delivery revolution :lol:

Dave

 

[Patriot_sPizza]

Re: further deliveries - higher del. charge or higher minimu

I’ve thought, if I deliver, I’d charge a $5 delivery charge (3 mile radius only), a $15 minimum and an automatic 10-15% tip & put it all on their credit card…

sounds “tuff” on the customer, but I could then reduce pizza prices to reflect decent F/C…rebate $2-$3 for the driver…driver would be more willing to hustle for the guaranteed tip…

 

[NicksPizza]

Re: further deliveries - higher del. charge or higher minimu
wa dave:

I know this post may get up some peoples noses but I,m putting my “1.25 cents” worth in (my opinions not as valued as j_r0kk’s 2 cents ) as I really feel that delivery has become a monster and a drain on our profitability.

Viva the pay for delivery revolution :lol:

Dave

then there’s the exchange rate for your “Monopoly” money over there.

Whatever you do, make sure you calculate your actual costs for that delivery. Make a reasonable range based on TIME. If I send a driver on a 40 minute run, it costs me food+packaging+67% of an hour wage+time that other deliveries sit waiting. Just in wages, it costs me $4 ($6 wage). I charge $1.50 fee with $1 to driver. So, that delivery costs me in real dollars, $3.50 out of pocket. Keep these things in mind.

We restrict to 20 minute deliveries with a $15 minumum. We have a map that gives us a rough estimate. We have people beg for a delivery in neighboring town 20 minutes away and willing to pay $5 fee to get it . . . it is just too far and would skew our drive times the rest of the night since it would end up being abuot a 50 minute trip . . . unless the train comes through, then over an hour.

 

[wa_dave]

Re: further deliveries - higher del. charge or higher minimu

Nick

What you are saying is absolutely correct (except for the monopoly money ).

When I took over the store we did deliveries to areas 11km away (about 8 miles). It took the drivers 45 minutes return trip and we charged $7.50. Paying the drivers $10 per hour equated to $7.50 for the time away PLUS the $3.50 delivery fee we pay them = $11.00 cost to me for a $7.50 delivery charge. It didn’t take long for this little black duck to put 2 +2 together.

We dropped these outer areas which only accounted for 5% of our deliveries and less than 3% of our total business. Funny they screamed blue murder and couldn’t / wouldn’t understand why we wouldn’t deliver to them anymore.

We put our emphasis to the delivery areas that give us 80%+ of the delivery business and reduced waiting times dramatically. Sales have gone up since.

Dave

 

[system]

Re: further deliveries - higher del. charge or higher minimu

Be very carefull everyone…unless you’re doing something illegal in the way you compensate your drivers, a drivers wage is really a fixed cost, not a variable cost. A driver’s wage has to be paid whether he delivers or sits on is butt. Trying to tie the driver’s wage to each delivery will cause you to make decisions which are less profitable for you.
John

 

[system]

Re: further deliveries - higher del. charge or higher minimu

K.I.S.S
Keep it simple stupid…no offense, but just choose your area, delivery charge, and minimum and stick with it…I have found consistency to be very important b/c people will not remember and given how complicated you solution would be neither will employees

 

[NicksPizza]

Re: further deliveries - higher del. charge or higher minimu

john:

Be very carefull everyone…unless you’re doing something illegal in the way you compensate your drivers, a drivers wage is really a fixed cost, not a variable cost. A driver’s wage has to be paid whether he delivers or sits on is butt. Trying to tie the driver’s wage to each delivery will cause you to make decisions which are less profitable for you.
John

Dave and I are talking about “cost per delivery”, which is a statistic and not a financial/labor/compensation strategy. We divide the number of deliveries per shift by the wages earned per shift to got our aggregate “cost per delivery” styatistic. It’s like ERA for baseball pitchers . . . but without the innings pitched and unearned runs.