With more than half of all pizza orders placed for delivery or takeout, the decision to use a third-party aggregator or run your own in-house fleet can define your profit margins. So, which model is best?
What Are Aggregators Really Costing You?
While third-party platforms like Uber Eats and DoorDash offer instant access to a massive customer base, that convenience comes at a steep price. The most significant cost is the commission fee, which can range from 15% to 30% or more on the total order value. According to a 2024 National Restaurant Association report, a restaurant with $1 million in annual third-party sales might surrender between $150,000 and $350,000 in commission fees.
While this seems like a simple trade-off for not having to manage drivers, those percentages eat directly into your already thin profit margins. A study by Orders.co found that a meal with a 15% in-house profit can drop to a 7.6% loss once aggregator fees are added.
Does In-House Delivery Actually Save You Money?
Yes, but it’s not without its own costs. The key difference is control. With an in-house fleet, you absorb the fixed costs of a delivery program, but you also retain 100% of the revenue from each order, plus the delivery fee.
While these costs can seem intimidating, they are an investment in your business, not a percentage of your revenue lost to a third party.
Fixed and Variable Costs of In-House Delivery:
Labor: Hourly wages for drivers (plus tips), which can be paid as a fixed rate or a tipped minimum wage.
Vehicle Expenses: Gas, insurance (including commercial or non-owned auto insurance), and vehicle maintenance.
Equipment: Insulated delivery bags, car toppers, and uniforms.
Technology: A robust POS and delivery management system is essential for efficient dispatching, routing, and order tracking.
Is It Just About the Money?
Profitability is the bottom line, but it’s not the only factor. The intangible benefits of an in-house delivery operation are often where you truly win. Brand Control: Your drivers are an extension of your brand, and you control the entire customer experience. According to a 2024 customer satisfaction survey, 72% of diners appreciate the personalized experience of ordering directly from restaurants.
Customer Data Ownership: When a customer orders through an aggregator, their data belongs to the aggregator. With your own online ordering system, you own the customer relationship and their valuable order history, which is gold for targeted marketing campaigns. A system like FoodTec Solutions’ branded consumer app and web ordering system allows you to capture and use this data to win back lapsed customers or reward loyal ones.
Angelo Gonzales, owner of Lee Angelo’s Pizza, notes that: “For every dollar I give that machine, it gives me $8 in return, but it’s only on their platform and they get to save and keep all the information. I don’t even know who my customers are.”
Service Quality: You have full control over delivery times and order accuracy. You can leverage intelligent dispatching and routing features in a system like Delivery IQ to ensure pizzas are delivered hot and fresh, directly impacting customer satisfaction.
What Does FoodTec’s Data Say About Order Size?
Our own analysis of customer data shows a clear pattern: customers spend more when ordering delivery directly from the store compared to third-party apps. The average ticket size for direct delivery was $40.86, compared to $32.03 on DoorDash and $36.70 on Uber Eats.
The Smart Hybrid Strategy
For many pizzerias, the answer isn’t an either/or choice. A smart hybrid approach combines the best of both worlds. Use aggregators as a marketing tool to attract new customers and expand your reach. As Angelo Gonzales explains, “If I can use third party as an acquisition cost to get them into our loyalty program, and I can automate that, that would be excellent.”
Simultaneously, encourage customers to order directly from you for a better experience and higher profit margins. By focusing on building a loyal customer base that orders directly, you can reduce your reliance on third-party platforms and build a more sustainable, profitable business.
Ready to Take Control of Your Delivery?
Building an in-house delivery operation can be a game-changer for your pizzeria’s profitability and brand. It’s an investment that pays for itself by increasing margins, strengthening customer relationships, and giving you full control over your delivery experience. To learn more about how a complete delivery management system can transform your operations, click below.