In times of the current pandemic, the on-demand food delivery sector is thriving. Many people turn to order food online because they are afraid to go out of their homes. And this has resulted in an increase in on-demand meal delivery start-ups.
Many entrepreneurs demonstrate marketing leadership and use this opportunity to deliver quality services to their clients and make money. Basically, the overall demand for meal delivery is growing daily, and there are many things that businesses can use with good business models.
Building an on-demand delivery app with the perfect food delivery business model may turn out to be successful in this crisis. Let’s take a look at the business model to shine the fortress of your future business.
1. Order Only Model:
In this kind of business model, restaurant owners are responsible for managing the delivery services themselves. The on-demand food delivery business is solely responsible for taking orders from users and sharing these orders with their respective restaurants.
The primary objective of such a commercial on-demand delivery business model is to allow restaurants to reach the broader audience base through both an integrated web and mobile channel. The platform manages revenue by charging a few percent commission on each order from the restaurant.
Food Ordering & Delivery Process:
- First of all, customers place an order from their nearby and trustworthy restaurant via the website/mobile app.
- The restaurant will then receive orders via an app or dashboard and send a confirmation via an email or an automated phone call to the customers.
- Restaurant prepares the order and hands it over to the delivery employee.
- The delivery staff completes the process by delivering the order to the customer’s doorstep.
Benefits:
This platform neither cooks nor delivers the food itself. These startup companies tend to charge 10% to 15% for food delivery services. And, as a pure software company, they have great opportunities for scale and outstanding growth.
Limitations:
In terms of price and cuisine, this model is limited in its on-demand service offers. They are primarily associated with consumers with relatively low-end takeaway food. Under this model, the food start-up cannot monitor or optimize the quality and timeliness of food services.
2. Order & Delivery Model:
This commercial model will deal with all restaurant’s logistics, home delivery services, and restaurants. It is one of the most widely used on-demand food delivery solutions used by businesses.
Restaurants just need to partner with these platforms as an eatery and don’t have to pay for drivers or couriers or maintain the vehicles/ taxi.
Restaurants only need to partner with these platforms as an eatery, and they don’t need to deal with drivers or maintain vehicles/taxis.
Food Ordering Process:
- Restaurants will be able to enroll on this platform with certain certificates.
- The orders placed by users will be submitted at the app or website interface, where all the menus are displayed from various restaurants.
- Restaurant will receive the order notification through mobile or website
- The restaurant notifies the delivery company about the time of collection of the parcel and the address of the destination.
- customers can make payment as per their convenience via online or cash on delivery.
- The platform will charge a certain amount of fee from both customers and restaurants.
Delivery Process:
The delivery employees closest to the restaurant will get the notification to receive the order and deliver it to the customer’s place.
Once the order is delivered to the customer, the driver will complete the process by updating the status.
Benefits:
Once the platform reaches its maturity in a city, it will be very difficult for a newcomer to compete with such type of personalized networks of restaurants and couriers. They also ask for a higher commission, an average of 25-30%.
Their main characteristics are that they can enable a range of restaurants and price points that software-only marketplaces cannot.
Limitations:
A second model platform is a software as well as a logistics company. In this business model, a lot of work needs to be done. Such as recruiting couriers, training, maintenance, preparing shifts, etc. Thus, these on-demand delivery app development are not as easy to scale as pure software.
3. Fully Integrated Model:
This platform manages the entire food cycle. They develop their own app, through which the owner will deal with everything from cooking to delivery. This type of business model usually partners with the chefs. The operation of a completely integrated model can be summarized as follows:
Food Ordering Process:
In this type of food delivery app development, there will be two methods of meal delivery:
- The former has no involvement from the administration, meaning that the order will be notified directly to the nearest driver.
- For the second, When a client places the order, it first goes into the administration panel, and then the administrator will assign it to the nearest driver.
Delivery Process:
The delivery is carried out by the drivers employed by the company, set of meals will be given to the driver and he will deliver. The meal based on the first come, first serve, or location-based factor.
Benefits:
In this model, everything will be operated by the owner. So they don’t need to rely on a third party for the user experience. And if all goes well, they can generate a huge amount of revenue as well as a customer base.
Limitations:
Operating costs are the only opposition to this model as the owner has to deal with everything from cooking to delivery, so it can be expensive.
Wrapping Up:
The food ordering and delivery industry is experiencing rapid growth in all regions of the world. If you’re planning for on-demand app development, you need to do some in-depth research and choose one of these three food delivery models based on your needs.
