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should we charge delivery?

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Hi

Just a quick question; I’m running a little pizza shop/café in a small rural town in Australia.

We don’t charge anything for deliveries.

Should we?

What do most of you think?

:oops: :roll:
 
I have asked myself and some of my customers the same question and have decided against it. A number of my regulars have stated they quit buying from the other places in town when they started charging for delivery.

When I get asked if there is a discount for picking up I answer “yes about 15 minutes”
 
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From one Aussie to another.

In my opion the answer is yes, yes and yes.

In Australia we have completely different & higher pay rates than the US and we don’t have the tipping mentality (no offence meant by this) that is the norm there. Their wages are supplemented quite highly by the tips they receive (refer to other posts about delivery).

If you don’t charge for delivery then you will go out the door backwards as you costs of labour will strip any profits from your sales.

Pizza Hut charge $7.95 per delivery regardless of where they deliver but it mostly in a 5km radius as they are restricted by franchised areas. Eagle Boys and Dominos are around $8.50.

We charge by area zones of $5.00 ( < 3km ), $6.00 (>3km - 6km ) and $7.50 ( >6km - 9km ) with the drivers getting $2, $2.50 and $3.50 respectively plus $10 per hour. While they are not driving they have to do prep, washing, box folding, answering phones etc etc.

On average the chains pay around $9.00 plus $2 per delivery with penalty deductions if they are late or make mistakes.

With the price of fuel and the lesser amount of deliveries due to a less denser population area you will need to charge for delivery just to cover costs. With the ever increases in cost of goods, insurances, rent etc you will barely make money whilst keeping your sell price at reasonable levels so there is little room to deliver free.

We have little or any complaints about delivery charges and if they do complain we tell them they are free to pick up at the shop for the cost of the pizza only or the other option is to put it a taxi and see how much that would cost them. That makes them think our prices are OK in the long run. wink:

But before you do start doing deliveries, especially in a small rual town where deliveries could be to a farm location that takes your driver away for too long, ASK YOURSELF - DO I REALLY NEED TO DELIVER?

You may find that delivery is not that important or there is enough to make it worthwhile.

I say and have always said “if I didn’t have to deliver I wouldn’t”. I find it costly, a pain in the butt trying to get and keep drivers and hearing from customers (allbeit only some but enough to p*ss you off) that 45 minutes delivery time on a busy night is crap.

Hope this helps you.

If you want to discuss it over the phone feel free to call me on 0400022188. I’m in WA.

Dave
 
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No offense to Daddio, but the only ones who should be doing FREE delivery either have an inferior product or inferior service. Then again if he always had FREE delivery and he doesnt want to piss off his regulars that may be a reason to keep it or maybe he already has it priced into the cost (not fair to take-out customers then)

I think it should be considered industry standard…cmon guys $1.50 delivery charge instead of trying to slash everybody throats lets work together! It is a service and anybody reasonable should realize that everything comes at a cost.
 
No Offense taken. Yes I have always has free delivery but like I said your discount for pick up is you get your food sooner. Most of the joints here have free delivery so most customers expect it.
 
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I have struggled with the free delivery question. I am opening up another shop this week and have decided to charge a whopping .50.

All my other shops were free delivery. I think it’s time for the free to die. I see local shops advertise “FREE” delivery as if that is their best product/service they can offer the customer.

I agree with the poster that said free should be for inferior product/service.
 
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pizzatime:
I think it’s time for the free to die. I see local shops advertise “FREE” delivery as if that is their best product/service they can offer the customer.

I agree with the poster that said free should be for inferior product/service.
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I always get a bit sceptical about FREE. Nothing is FREE. It is always costed in somewhere.

Those advertising FREE as their main selling/promotion point are probably doing “lousy pizzas that sell” quality and charging gourmet / good indie prices. Where is it “FREE” when this happens? They are probably selling $5 quality pizzas at $12 and in reality gwtting $7 delivery.

As I have said in other posts related to deliveries, “if you don’t charge for deliveries you will go out the door backwards”. With today’s increased costs and eroded margins I can’t see how anyone can do deliveries without charging.

Dave
 
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I’m still offering free delivery and don’t see changing anytime soon. Since 2002 most everyone else in my market has added a delivery fee. While I can’t speak for my competition, my sales have increased 50% since then and my profits have doubled. All the while, Dominos has increased from 3 to 6 stores in our town. Another thing I attribute the sales increases to is that I still strive to keep delivery times under 30 minutes, while most of our competition is lucky to give 35-50 minute deliveries.
 
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A huge thank you to all who contributed to my post.

“I have asked myself and some of my customers the same question and have decided against it. A number of my regulars have stated they quit buying from the other places in town when they started charging for delivery.â€
 
“moneyfrompizza???” said:
A huge thank you to all who contributed to my post.

“I have asked myself and some of my customers the same question and have decided against it. A number of my regulars have stated they quit buying from the other places in town when they started charging for delivery.â€
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It costs you one way or another, so you have to charge for it one way or another. You can have higher prices to cover it, but that hurts your pick up customers, so it is best to charge for the service you are providing to your customers.
 
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Yes charge for delivery. Why give it away for free, so what if thats what everybody else does your in the business to make money.
 
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pizzaguy:
Yes charge for delivery. Why give it away for free, so what if thats what everybody else does your in the business to make money.
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My sentiments exactly

Dave
 
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The numbers side of things:

Take these constants in an ordinary store…

$10,000/week in sales
50% delivery
$15.00 ticket average
you pay drivers $1.50

333.33 deliveries x $1.50 = $499.99 in delivery fees that you would pay out to drivers, or, 4.99% mileage, which is added onto your P&L, which is extra money you DON’T make in profits!

WITH a delivery charge you gain that $500 you’ve paid out. If you don’t charge, you will pay out $26,000 in one year…$130,000 in 5 years.

In conclusion…

Charge the fee. You can’t afford not to. -J_r0kk
 
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Here’s a scenario we faced with deliveries. Bear in mind that in Australia we pay higher rates for drivers than you do in the US and Canada.

Zone 3 delivery area we charge $7.50 per delivery. Drivers get $10 per hour, plus $3.50 delivery fee for this area.

One order comes in for delivery to far reaches of zone, approx 14km (9 miles) with no other orders to go with it. Driver is gone for 40 minutes as street is hard access.

Cost for 40 minutes@ $10 per hour = $8.00. Delivery fee to driver $3.50. Total to driver $11.50. Delivery charge to customer $7.50. Nett loss doing delivery (-)$4.00.

Even doing 2 deliveries to far area of zone with driver still 40 minutes for deliveries = $8.00 in hourly rate plus 2 x $3.50 delivery fees = $15.00.
2 x $7.50 delivery charges = $15.00. Yipee we break even. EXCEPT all other deliveries are now behind our goal of 45 minutes.

Solution we took. Drop deliveries to these areas (zone 3) and concentrate on zone 1 which represents 70% of all deliveries and zone 2 (25%) and guarantee deliveries of 45 minutes on busy nights and less on quieter ones.

Results. Sales remain same even allowing for lost sales in zone 3 as zone 1 & 2 customers now ordering more often as they get deliveries quicker and hotter. Plus drivers getting heaps more tips as customers happy with fasr delivery times.

Lesson learnt. Even charging for deliveries does not always cover costs. Without charging for deliveries in the first place we would go broke real quick.
 
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j_r0kk:
Dave,

How much do you charge for delivery in zones 1 and 2?
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Zone 1 - up to about 3 - 4 km (2 miles) radius from the shop we charge $5 with the driver getting $2.00.

Zone 2 - from 3 - 4km - 8km (5 miles) radius we charge $6 with the driver getting $2.50.

We are in standard suburbian districts with single houses with no high density housing (ie no streets of numerous blocks of units / flats).

We need to pay the amounts to the drivers with fuel prices around $1.20 per litre (down from $1.45) which equates to around $5.50 per gallon in your terms. Even with this they whinge that their portion barely covers their cost of fuel for the night.

Dave
 
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We charge $2.00 to deliver to residences and no charge for businesses. Most people don’t have a problem with the fee. Every now and then someone does but once they try our products they never do again.
 
I opened 2 months ago and I charge $1 for deliver I have not had one person ask me about it. It is easier to do from the start like I did then to add it later
 
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I opened 2 months ago and I charge $1 for deliver I have not had one person ask me about it. It is easier to do from the start like I did then to add it later
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mdpizza,

I agree 100% wholeheartedly with you. It IS so much easier when customers think it’s just standard operating procedure.

wa dave,

Man, first of all, you need to tell your government to lower the prices of the gas. Geez! $5.50 a gallon? You’ve got to be kidding me. With all that sand around that country you can’t find a couple oil mines? I will definitely admit I’m not even close to an expert when it comes to running stores in other countries because, as you stated, it’s a whole different ballgame over there. Good luck -J_r0kk
 
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