How Food Delivery Business Models Boost Restaurant Profits?

• Ankit Patel
• September 16, 2022
• 5 min read

Food ordering app have given the traditional restaurant setups an edge in terms of getting their services boosted visibility among a greater percentage of customers. Especially after the pandemic; these solutions saw their popularity growing manifold. This is a major reason the valuation for the market is high. The revenues are predicted to become $137 billion by 2023.

This is courtesy of the presence of the app and the smooth way it connects users to food joints nearby so they get quick meals at their doorstep, regardless of the hours. Alongside this, it also has beneficial value for restaurants in terms of aiding them to boost their visibility online.

Thus, all in all, if you are operating a traditional food delivery setup, we can say that the app is nothing short of a boon in disguise.In other words, get the app advantage and adopt a business model so revenues keep pouring. The latter will be covered by us in the article.

Statistics Giving Lucrative Scope of On Demand Food Delivery Business

The pandemic resulted in the popularity of the on demand food delivery business growing manifold. These numbers give an estimate of the overall profitable value of the venture.

1. The food ordering app industry will earn revenues of $320 billion by 2029
2. The current value for the online food delivery segment is $323.30 billion
3. The number of users will become 2613.2 million by 2027

Looking at these numbers, you can get an idea that the industry has a bright future ahead of it. This is why those operating a traditional food delivery setup need to select an appropriate business model. With it, the venture will gain a competitive edge in a reasonably short time.

Popular Food Delivery Business Models

When building a powerful food ordering app, one of the prime requirements is to place focus on the business models. Particularly if you are planning to channel profits through the meal deliveries you provide.

As you can see in the image above, there are two main kinds of food delivery business models namely:

1. Aggregator Model
2. Inventory Model

The former (aggregator) is subdivided into integrated and order and delivery models respectively.

◉ Aggregator Business Model

The model involves the registration of multiple restaurants on a platform like a food ordering app for instance and starting their operations thereafter. Customers can log in and order meals from that platform. This platform acts as an intermediary between the user and the food delivery joints.

Some top food delivery apps in the market that use this model are JustEat, Delivery Hero, etc, to name a few. As mentioned above- the aggregator model has been subdivided into two kinds, integrated and the order & delivery kinds.

Let us know about these two sub-types in the lines below.

• Order and Delivery Model where a third-party platform manages the delivery and the platform owner charge commissions for the orders from the delivery partner.
• Integrated Model where admin and restaurant both manage deliveries, and the latter gets a medium to boost the visibility of their services online.

◉ Inventory Business Model

The model involves a single entity- the online food delivery business performing actions; starting from app and website launch; to order preparation to meal deliveries. This is a model that allows the food delivery business owner to keep a check on the food quality and ensure its top-notch nature. Take a peek at the image below to get clarity on this model.

How to Make Appropriate Food Delivery Business Model Choice?

To ascertain that your food delivery business makes the maximum profits through the meal delivery services it provides, the choice of the business model should be done appropriately.

Follow these steps to accomplish this as a pro-

• As a newbie, the order-only model is right.
• Once you are ready to deal with more eateries include another model along with the above.

These will ascertain that you get the maximum benefits from the food delivery business model you choose in terms of profits and customer base both.

Reasons Why You Need Food Delivery App for Your Restaurant Setup

Take a peek at the image below to glance through the main factors that make the food delivery app a boon in disguise for your restaurant setup.

As you can see in the image above, four factors are predominantly responsible for you to get access to an on demand food ordering app. They include- convenience, time factor, mobile penetration, and appeal.

Let us understand each of these below.

• For convenience:- This means better customer experience gets offered through the solution as a result of selection of a business model focused on user experience.
• For saving time:- This is something that the app makes possible as a result of giving users the support to access multiple restaurants, food choices, and payment options so they can order meals smoothly and enjoy the same with near and dear ones.
• For ease and reaching out to maximum users:- This is through the app giving food delivery joints the support to get their services boosted visibility and the desired ability to reach out to a maximum percentage of users.
• The appeal factor:- This is through the different referral programs so the restaurant can keep maximum users engaged to the end solution.

Knowing the business model and reasons why you need a food ordering app, you are ready to step into a world filled with profits for your food delivery startup. Wondering how? Follow these steps to develop a food delivery app to successfully get a competitive edge over your competitors through the solution. It will ascertain that food delivery services are top-notch for revenues to remain to pour.

Steps to Follow When You Develop a Food Delivery App

Until and unless you remain methodical during food delivery app development, success cannot be guaranteed. Therefore, you need to follow a strategic approach and include these steps.

• Conduct Research:- Through thorough research on what your competitors are doing; the solution they have developed; the customers and their requirements, and last, the level of satisfaction they have with the current food ordering application, you can be sure to reach the zenith of success in a short time.
• Know Features to Add:- Identify features whose inclusion will boost value for your app and allow customers, delivery partners, and restaurants to operate the solution conveniently. Also, it will ascertain that your application gets a standout appearance and deliver top-notch meal delivery services at all times.
• Select Appropriate Revenue Model:- Assess your food delivery business requirements so you can get your profits boosted. This will make your selection process for an appropriate revenue model easier. There are four ways through which you can monetize your app- delivery fees, paying extra during peak hours, charging for advertising, and last through commissions.
• Pick Robust Tech Stacks:- You want your app to function smoothly. This demands the use of appropriate and robust tech stacks. With it, you can ascertain that incidents of crashes will get reduced completely. It will alternatively also allow food delivery services to take place smoothly.

So are you ready to give your traditional meal delivery set up a competitive edge? It demands you remember these points above. Also, you need to place focus on the cost factor.

How Much Does It Cost to Develop Food Delivery App?

When you enter the journey of on demand food delivery app development, the approximate cost to develop the application will be between $10,000 and $20,000. However, if you consider this on an hourly basis, getting the app development services outsourced, the amount you have to spend will be as follows-

• For the US, between $50 and $250 on an hourly basis.
• For Eastern Europe, between $30 and $150 on an hourly basis.
• For India, between $20 and $40 on an hourly basis.

Wrapping Up

Building an online food delivery business is in vogue. This is a prime reason why you need to know about the business models and get knowledge of their pros and cons. This will go a long way in boosting your revenues and giving your food delivery startup the desired competitive edge. If you are still struggling with this, we have the desired skill sets in assisting you in the task. Through our top-notch consultation, we will ideate a business model that streamlines profits for you based on the food delivery services you provide. We will also give you access to a custom food ordering app that allows you to scale as per your business tailored needs so you earn profit.