Helping restaurants through COVID-19 | Part 2: Setting up your own online ordering system
As a restaurant owner for 5 years now, being associated with external delivery companies has generated a lot of business for us, however it also has placed massive financial pressure on my venues by paying upwards of 35% - 38% commission on each order.
In reaction to COVID-19, I assessed my financials to see which costs I had control over, and adapted very quickly to minimise reliance on external delivery companies, pay less commission and make online ordering profitable for my business.
I quickly set up my own online ordering system, and In the last month, I have decreased my external delivery orders by almost 70% and increased my own internal online orders by 200%. This has increased my profit margin, allowing me to be able to pay some of my bills and reduce the stress a little during this time.
Setting up your own online ordering system
I began by conducting some research all around the market to find the most affordable and quickest solution to be able to get me up and running as soon as possible. I looked at many different options in the market and began to work with a company who has been in the industry for a number of years and has provided this online ordering platform already to many venues all across the country and also around the world.
I immediately set up both of my venues on this platform and began offering my customers the ability to order from our menu directly through our website. It is also linked from our Facebook and Instagram pages, directly through to our online order platform. This system is really easy and user-friendly when a customer visits our website, and there are no large commissions for processing these orders.
Survive now; thrive later
Our kitchen staff are familiar with using electronic devices in the kitchen for order processing and therefore this was really quick and easy to be able to integrate into our business processes as we were already using external delivery platforms and tablets in the kitchen.
Due to the online ordering platform, my two venues run automatically without me having to work onsite. This also removes the need to employ additional staff to manage the front of house and deal with customer orders.
I simply work from my home office with the shop telephone diverted to my mobile so that I can still quickly respond to any customer enquiries, however 90% of the orders are now processed through our online order platform without any manual intervention required at all besides the kitchen staff making the food and handing over the order to the customer.
Naturally, this assists during the period of COVID-19 that we are all dealing with, however the true value is how it will benefit the business long term once the restrictions are lifted. We also plan to expand on our product range to be able to offer items such as our house made sauces, drinks, merchandise and more available for delivery Australia wide and potentially around the world through our new online order platform.
Once the restrictions have been lifted, my intention is to treat the business as having two separate types of businesses at the one location: an online and a retail business.
The online store will have a different offering than our in-store restaurant, we will have our menu available and other products not available in the restaurant, whilst this also gives us the ability to expand our reach further than our local customer base and generate a separate revenue stream for the business. The retail part of our business is what we deliver as an in-store dining and bar experience for customers to enjoy, this will have a different offering compared to the online business with its own revenue stream.
If you open your mind, the possibilities are endless.
How to successfully manage home delivery
Now that my online ordering system was set up, one of the biggest and most daunting challenges was to try and understand how I could offer my customers the same service as some of the external delivery platforms by offering my own home delivery service.
Many venue owners that I speak to are scared of the thought of doing their own home delivery. I can relate to this because I felt exactly the same way. I deployed a number of tactics into my business to experiment and find the best solution that worked for my business to be able to offer our own delivery.
During my experiment I tried many different ways of being able to fulfil my home delivery orders from my online ordering platform. These tactics have worked for all businesses I now help, however some may work better for others depending on what resource they have available to them, their location and the volume of delivery requests they receive.
Method 1: At first, I completed the deliveries myself to understand the impact on my business. You are not going to start doing every single delivery order through your website; it will be a slow but steady transition if you are doing things right.
Method 2: Next, I attempted to utilise existing staff or friends of staff who had recently lost their jobs, to offer them a way to earn an income.
My biggest concern as a business owner was that I was uncertain of how many delivery orders I would be receiving and therefore did not want to commit to paying somebody by the hour to fulfil our delivery orders.
When ordering on our online platform, customers will pay a delivery fee to have their order delivered to their home. This delivery fee will vary depending on how far away from the venue they are located. I would then offer somebody to handle these deliveries and would pass on the delivery charges to the drivers. I would also offer a place for them to study, a place for them to have a free meal and a drink on the business for their time and effort as we work through this process together
On some days it was not viable to have this person working because it was not fair to them given the low delivery volume on certain days. However, on other days the delivery driver could make up to $80 for a few hours’ work, which was a win-win for everyone involved. We kept this arrangement in place on our busy nights being Friday and Saturday night because it made a lot more financial sense to both the individual and the business. In the early stages whilst we were testing our delivery, this gave us the flexibility that the business needed in the short term.
Method 3: I am currently working with a network of drivers and riders who are available Australia wide. These drivers are available any time and have a cost of approximately $8 to $11 per delivery depending on how far the delivery is.
If you were to charge your customer a $5 delivery charge, and the cost of the delivery driver was $8, this would be an overall cost of $3. $3 is an awful lot less than paying commission to many of the external delivery platforms that we all use today.
There are a number of options for businesses to take advantage of this. Please contact me directly for more information on how I can help you with this.
As of right now, we are building up a consistent online ordering business and customer database, and slowly educating customers to order directly from our website for pick up or delivery. My next blog post will go into detail on how to promote your online ordering system and incentivise customers to use it.
Check out KeyPay's COVID-19 Hub for the latest legislation updates and how to manage COVID-19 related processes in KeyPay.