App Development

Top 3 on-Demand Food Delivery App Business Models that you should know about

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On-demand food delivery app has been witnessing continuous growth from the starting phase. Taking a glance at the market review more and more entrepreneurs are moving towards on-demand food delivery app development.

However, before commencing an online food delivery business it is crucial to understand business models. Now let’s have a glance at some points to gain more knowledge about online food ordering apps.

How Does an On-Demand Food Delivery Business Work to earn money?

There are multiple ways by which online food delivery startups can gain money:

  • You can demand fees from the restaurants as you are offering them the services. The position of a restaurant mainly depends on the charge it pays. The more it pays the better its position would be and sometimes it also depends on the customer review.
  • If you are willing to earn additional income then Ad placement is also one of the finest ways which can assist to earn more income.
  • A particular delivery charge from the customer who orders from the restaurant is also one of the ways for generating income. 

Must be Read about: Top Mobile App Development Companies

Points to consider before starting your on-demand food delivery business

  • Firstly before commencing food delivery app development collect all the requisite things such as internet connectivity, delivery persons and vehicles, telecommunication system, and much more.
  • Schedule a clear and effective marketing strategy so that competitors don’t affect.
  • Build your online service mobile-friendly and enhance your website for mobile and check how it looks on tablets and smartphones.
  • According to the size of your business appoint drivers accordingly. Also, make sure that the drivers you appoint are licensed and check their past records.
  • On the launching day ask social media influencers to interview and write amazing reviews about your restaurant. In addition to these give ads in the local newspaper and notify surrounding people about your business.

Types of Food Delivery Apps Business Models:

There are various types of successful business models that have proved fruitful:

 -Only Order type

The origin of restaurant ordering services followed this ordering type, business model. Over here the service supplier acts as a conveyer between the customer and local restaurants with the help of its online portal.

This business model permits the restaurants to build a strong presence with the help of a huge audience. It will also assist customers in associating with the restaurants to place and deliver orders.

Order Allocation

  • Customers are able to make their order from its application or website
  • Restaurants will receive orders via mail, or notifications.
  • Once the restaurant will receive an order they will notify by sending messages or calls.
  • At some point, orders are directly printed into the kitchen with the help of a POS system.

Delivery

  • A delivery person from the restaurant will arrive at your doorstep.
  • The restaurant will give the customer’s number to the delivery person.

Merits

  • In this type of business, owners don’t have to worry, nor do they have to face any issues regarding food delivery.
  • One can also charge a commission fee for every order placed by the customer from the restaurant.

Demerits

  • It’s difficult to allure customers as competitors are growing so you have to think creatively and implement new dishes.
  • You need to focus more on the marketing side to make your business fruitful and it completely depends on the restaurant how it provides service to the customer.

 -Order and Delivery Type

This is one of the most common types of business models and it manages customers, restaurants, and delivery. Generally, most of the eating houses would like to sign up themselves with this kind of business model as there is no hurdle with the delivery thing. 

For ordering allotment

  • Restaurants can register on your food delivery portal hassle-free.
  • With the assistance of your portal customers can place an order from their favorite restaurant.
  • The order request will be accepted by the restaurant owner through app notifications.
  • Lastly, customers can either pay online or cash on delivery at their convenience.

For delivery allotment

  • The delivery person who is nearby the eatery location will automatically get a notification to receive the order and deliver it to your doorstep.
  • Delivery charges are applicable as per the distance
  • Customers can give miscellaneous information to a delivery person such as do not knock the door, putting it in a box, etc

Merits of Order and Delivery Model

  • You can charge a good percentage of commission to the restaurant on every order and also charge delivery fees from customers.
  • Give your customer quick and systematic delivery by providing brilliant training to delivery persons. It will help you in gaining more ratings and reviews for your online food ordering app.
  • Track all your activities that are performed in your restaurant and enhance your business.

Challenges faced by order and delivery models

  • The biggest challenge on-demand food delivery solutionsfail because they fail to deliver the orders on time.
  • Sometimes food delivery business fails due to a lack of management skills when it comes to handling other activities.

 -Comprehensive Integrated Type-

This food delivery app business model is different from the other two models as it consists of a completely different plan for an on-demand delivery solution. In this model, the owner is fully responsible for the complete activity right from cooking to delivery. Therefore almost every food delivery services partners with chefs.

Order Allotment

This business model works in two-phase:

  • In the first phase, there won’t be any requirement of admin means when the order will be placed it will be directly notified to the nearest delivery person.
  • Whereas in the second phase admin is needed and once the customer orders admin will get a notification and the admin will allocate the nearest delivery person.

Delivery Allotment

  • Over here food delivery is done by a driver that a company assigns.
  • It can either be a customer’s requirement delivery or scheduled delivery.

Advantages

  • The main and best part of this business model is that you don’t have to rely on any third-party service for user experience.
  • There is no one in between all the operations are managed by you so if everything goes smoothly then you will earn more profit.

Disadvantages

  • High operation cost
  • Unable to manage all functions

Final Thought

Nowadays everything is turning digital therefore developing an on-demand food delivery business is lucrative. However, it is mandatory to research your business and your competitors.

You can also take the help of some brilliant entrepreneurs who are in this sector and you can select any business model that suits your requirements. If you are seeking more guidance and support feel free to get in touch with us and receive an excellent on-demand food delivery app.

Mushahid Khatri is the Chief Executive Officer of Yelowsoft, one of the leading grocery delivery app development providers. He is a visionary leader who believes in imparting his profound knowledge that leans on business and entrepreneurship.