Starting Delivery

[starchild1970]

We are a sit down pizza shop and decided to start delivering. What are some basic things we need to know before we get started?

 

[Fire_Side_Pizza]

Some of the other posters are going to ask why start it? How much of an increase in profit do you think you’re going to make? The cost of the insurance, a vehicle possibly, and other issues that arise from having delivery. There may be extra labor costs.

Those are some of the stuff I would look at before starting.

 

[starchild1970]

Hi Jim,
Thanks for the reply. The reason we are going to start is to pick up more sales. With the economy the way it is, in stores sales slowed. We figured our break even is 4 pizzas per driver. We are going to start out delivering Mon -Thurs. to test it. I got the insurance to a cost effective price. I was going to contract out the driver. I just didn’t know what other surprises we will encounter or what else we should do to prepare, Etc.

Jimmy

 

[UncleNicksPizza]

I know here in Florida you can not 1099 drivers, have to be w4 employees and covered with non owner vehicle insurance. Might be better to start delivering only on Fri / Sat since those are your busiest days for pizza delivery demand.

 

[Pizzamancer]

You will only increase your headaches. If you could post an actual plan, with numbers and calculations about how you would increase profits, then go ahead. In many cases, more sales, especially delivery sales = less profit.

You mentioned 4 pizzas per driver. That essentially means nothing. You need to think about deliveries per hour. Max, you are only going to do 3 deliveries/hour/driver, unless you are delivering $10 pizzas in a college town.

 

[bodegahwy]

Clearly there is significant opportunity in delivery. If you are already open for business and paying the rent etc, the sales are incremental and can add to profit nicely.

Not sure what your “four pizzas per driver” refers to. As Pizzamancer points out, deliveries per hour is what you need to focus on.

Drivers can not be contractors. You are taking a major risk if you try to go that route. Talk to your CPA and attorney about it. You write the work schedule, you set the compensation, you provide things like hot bags… they are employees and you pay work comp, unemployment etc.

Insurance is not cheap. You CAN NOT rely on the drivers to have their own coverage. You need to buy hired and non owned coverage to protect YOU.

Delivery is a competitive market, you will need to invest in marketing to drive sales.

If you can add $500 per night in sales it is probably very worth doing when added to an existing sit-down operation. If you are thinking that adding $100 per night will be break even, you are mistaken.

 

[flippinhonda]

Whats going to happen when your delivery customer happens to be a dine in customer?

You’ve lost the opportunity to upsell or get an impulse buy in the store and they are only buying for delivery what they need.

We were a sit down that tried delivery… First off its VERY Frustrating to find delivery drivers that are going to be GOOD Employee’s… Reliable and without a record.

Secondly. At the end of the day if you are not selling tons of pizza’s via delivery your not making any money. your just paying for extra staff.

Customers, also turn into a problem “my stuff is to cold… or it took to long…” you will hear everything.

Good luck, but I would not go into the delivery field again.