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How Delivery Options Could Benefit Your Small Business

Delivery services have been established for decades now, but have not seen a lot of change until "recently" with Amazon. When I say recently, yet Amazon revolutionized delivery a few years ago by offering same-day delivery. It didn't take long before other companies began to offer the same thing, and not long after that, people's favorite fast-food restaurants began to make getting a Big Mac easier than ever before. 

A study done in 2017 showed the rate at which companies were beginning to join the new same-day delivery wave. The study showed that the top 500-retailers were testing same-day delivery in their stores. 14% of these retailers were delivering groceries, food, and beverages. If you flashback to a year before this survey, only 16% of retailers were offering any type of delivery. Once companies saw the benefits of delivery, that 16% tripled in size and most retailers began to offer delivery services of their own. 

Not every business had the resources available or didn't want to invest in their own system back in 2016. Companies like Grubhub and Uber Eats lent a hand to that vast majority of businesses. In 2016, only 20% of companies were using third-party delivery, but that number quickly grew the next year to 36%. While many companies built their own delivery service, other businesses like McDonald's and KFC went a different route and partnered with these 3rd-party delivery services. Now, smaller third-party services are entering different markets that some of the bigger delivery services haven't inhabited yet but that space is quickly shrinking. 

For most businesses, including yours, using a big third-party is your best choice if it is already prevalent near you. It eliminates most issues that can come from having a delivery service. These issues include packaging, cost of delivery, maintenance on vehicles, and insurance for delivery-drivers. Using these big companies also eliminates creating an ordering system, i.e. website, app, over the phone. There is a lot that can go into offering this service with your business, and this generally will cost you more money and more time. If your area lacks the presence of Grubhub or Uber Eats, then you may want to consider building your own system to avoid paying third-parties more to deliver your goods.  

Now, delivery is generally paid by the consumer but these third-parties must get their share of the profits as well. At the end of the day, you want to make a profit so make sure your margins are set up to keep you in business. Lastly, one of the biggest issues with delivery is the lack of payment options. Currently, there are no ways to accept SNAP benefits with these delivery services, although, these plans are in development. Some companies like Amazon, Target, and Walmart do accept EBT and delivery, but only to people with disabilities. This does give you the opportunity to create your own system that offers delivery and accept SNAP benefits, but SNAP does not cover the cost of delivery. EBT will only pay for the food itself so your possible options could be charging more for your items or asking customers to pay the delivery fee with out of pocket. There are systems being tested to make delivery accessible to people on a budget so view this as an investment opportunity, and beat the competition.

As time goes on, more innovations will be made and, sooner rather than later, these companies will accept EBT for the most profit possibilities, but it never hurts to get ahead of the curve. If you can set up a flawless system and educate your consumers before this technology hits the market, then you are looking to make the biggest impact in your business. Innovating now and adding this might be the competitive edge your business needs to beat out competition or simply get ahead so decide what is best for your business.  

 

in Building Your Business, Industry News, C-Store Trends