Whether you have a product you want delivered right to your customers’ doors or need a new way to distribute it, a third-party delivery service is the perfect place to look.
Third-party delivery services are gaining increased steam in popularity, especially among the current pandemic. In fact, research suggests third-party delivery services would consist of 70% of all delivery sales by 2022. Here's how to partner with a third-party delivery service.
[Read: The Delivery App Landscape Is Changing and Sustaining Businesses During COVID-19]
What is third-party delivery?
Third-party delivery is an option for businesses seeking to deliver their goods and services to consumers. Instead of having to use their own vehicles and drivers, businesses can outsource these services to a third-party delivery service. These providers are able to take on the workload while still maintaining an efficient delivery process on behalf of the business.
Using a third-party delivery service requires you as the business to pay a delivery fee to the service provider, usually at a fixed price. It keeps you from having to pay for a set of staff and insurance costs solely responsible for delivering your products.
Examples of third-party delivery services
Here are some examples of third-party delivery services for different types of companies.
Third-party delivery for restaurants
- DoorDash: DoorDash partners with both large and small businesses for food delivery services. They charge a premium to increase your business’s visibility and take a cut of about 20%-25% per order. Charges vary by state.
- Grubhub: As one of the largest third-party delivery services in the United States, Grubhub is offered in most major cities. They ask for 3.05% plus $0.30 processing fee as well as a 10% delivery fee. Grubhub also charges a premium for more visibility.
- Postmates: Postmates was one of the first third-party delivery services to exist. Their commission fees are typically between 15%-30% per order, and sales tax depends on the state.
- Uber Eats: As well as being a rideshare service, Uber also provides consumers with third-party delivery services with Uber Eats. To work with them, there’s a one-time fee of $350 for processing and a 20%-30% commission charge per transaction.
Third-party delivery for retailers
- Instacart: Mainly a service used for grocery stores or alcohol delivery, Instacart has a robust system in place for providing timely delivery services to consumers.
- Shipt: This service is owned by Target Corporation and has similarities to Instacart. However, they have a larger scope of products they deliver.
[Read: Shipt, Target’s Delivery Startup, Eyes Growth in a 'Contactless World']
Getting your brand name out there through third-party delivery services allows consumers to give your business feedback and gain brand recognition.
Benefits of using a third-party delivery service
Reach new customers
Placing your business on a third-party delivery service provider’s app or website will allow more consumers to see your products and services. This opens up your business to a larger demographic.
Grow sales
With your products now deliverable, consumers will have greater incentive to order from your business. This new revenue stream will ultimately drive sales straight to your business.
Boost profit margin
The less money you’ll spend on an in-house delivery service, the more you’ll be able to put towards your business in the long run. While third-party delivery services do require certain fees, they are a small price to pay for increased profits long-term.
Increase brand awareness
Consumers are more likely to trust a brand that’s backed by other service providers. Getting your brand name out there through third-party delivery services allows consumers to give your business feedback and gain brand recognition.
How to partner with a third-party delivery service
Here the five steps to take to partner with a third-party delivery service:
- Research different third-party delivery services to find one that best suits your business’s needs.
- Visit their website to learn how to make an account and whether a point-of-sale (POS) service you currently use can be integrated into your website.
- Choose what products or menu items you want to include in your profile for consumers to choose from. Optimize each item to best suit a wide range of customer needs, including customization.
- Set how you’d like to receive orders either through the app or POS integration.
- Begin receiving and preparing orders. Simply wait for the delivery driver from a third-party service app to pick up and deliver directly to your consumer.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
Follow us on Instagram for more expert tips & business owners' stories.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
