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Want to Start an Online Food Delivery Business? Here’s How

Delivery company worker holding grocery bag, food order, supermarket service

According to Statista, The market size of the global online food delivery sector was 111.32 billion U.S. dollars in 2020. However, by 2023 the market was expected to have grown at a CAGR of 11.51 percent to reach 154.34 billion U.S. dollars.

With the high demand for online food delivery services, the country has witnessed many startups similar to Delivery Hero, Just Eat, and Uber Eats stepping into the global market. For all those who are planning to build an online food ordering and delivery app using an online food delivery app solution, this seems to be the best time considering the rising demand amid the pandemic.

How to Start an Online Food Delivery Business?

  1. Research About the Government Rules and Formalities to Get Started Beforehand: When you decide to start an ecommerce business like the online food delivery business in a particular country, you first need to know about the legal formalities and the rules & regulations set by the government related to your ecommerce business idea. Business permits, tax payments, sanitary permits, and food handling seminars & permits are some examples.
  2. The Market Research: The second step is to conduct in-depth market research even if you belong to the same industry. Before starting an ecommerce business, you must be well equipped with knowledge of the latest market trends and industry practices in that niche. Analyzing the competitors, understanding the target audience, and deciding the technology for building your food delivery platform are a few of the elements to consider while conducting the research.
  3. Find a Niche: Once you have decided on the targeted area, consider finding a niche. For example, in the online food ordering & Delivery Business, you as an entrepreneur can specifically target the office employees, or focus on a wider segment depending on your business idea. 
  4. Online Food Delivery Business Model: After deciding on the niche market, you must strategize the business model of your online food delivery business. So let’s quickly move on to the business model to understand the critical aspects of an online food delivery business:
    • Tie-ups with the local restaurants
    • Establishment of a food delivery network to make sure orders reach the customers on time
  5. Plan Your Revenue Channels: While planning the structure of your business, you must consider multiple revenue channels. You can incorporate various revenue-generating methods like commission, subscription, service charges, and other methods like hosting banner ads, publishing sponsored content, etc.
  6. Consider Mobile-Friendly Approach: The usage of mobile phones for ordering food online is more in countries like the US, UK. People prefer to place orders online by using a user-friendly mobile app. Therefore to reach your targeted customers in countries like the US, Germany, and the UK, you need to build a mobile-friendly platform.
  7. Plan Your Marketing Strategies: Marketing your online food delivery business is a must. Plan your marketing strategies to invite restaurants to register on your platform and on the other hand create marketing strategies for the customers to start using your platform for food ordering. Word-of-mouth marketing is one traditional type of marketing strategy that still works.
  8. Build Your Online Food Delivery Mobile App: Once you’re done with planning marketing strategies, start building a website or mobile app for your online food delivery business. Though building a mobile app or website from scratch could be challenging, it is advisable to contact a software development company or use a scalable food delivery solution like Yo!Yumm.

How Does the Online Food Ordering & Delivery Marketplace Work?

Online food delivery marketplaces like Uber Eats are primarily based on the “aggregator business model” in which the admin/ the business owner earn revenue through service commission.

Basically, platforms like Uber Eats provide a centralized hub for all the local restaurants & other food outlets of the targeted location to register and serve their customers. Whereas the customers can order food from different registered restaurants on the food ordering website or mobile app and get the food delivered to their doorsteps with easy payment options.

How The Food Ordering & Delivery Platforms Work

  • Assuming that you already have an app for your food delivery business, the first thing that the customer will do is download your app.
  • After downloading, the customer needs to update his/her general information like email or phone number to log in and create an account.
  • After logging in, the customer can easily explore the portal for cuisines & listed restaurants
  • The customer can place the order along with instructions for the chef after confirming the delivery address and making payment.
  • The restaurant gets the order and confirms it. On the other hand, the customer receives a notification that the order is accepted with the estimated delivery time displayed.
  • While the restaurant prepares the order, a nearby delivery agent is assigned the order for delivery.
  • The delivery agent will accept the delivery and head towards the pick-up point (restraint) to collect the order.
  • After the order is collected by the delivery agent, a notification stating that the order is out for delivery is sent to the customer.
  • The delivery agent delivers the food to the customer and marks the order as completed. This update is then shared with the restaurant and the owner of the business.

How to Build Your Online Food Delivery Mobile App

To get started with an online food delivery business, you need to secure a URL and website hosting. In addition to that, you also need to estimate the cost required to develop your online food delivery website or mobile app.

The cost of custom development from scratch is generally high. Therefore, for developing a food delivery website or app, you must choose a solution that is both cost and time-efficient.

Following Are the Development Options That You Can Choose From

  1. Opt for a Readymade Solution: To launch an online food delivery website and mobile app, you can opt for a readymade solution to save your time and money. While looking for readymade food ordering & delivery marketplace software, make sure you consider the two main factors i.e. user-friendliness and flexibility.

Also, because of the COVID-19 pandemic, there are some additional features that your online food delivery business must offer to keep up with customers’ changing preferences and requirements.

Key Features to Have:

  • Multiple revenue streams.
  • An attractive Homepage design with all the major components and clear navigation.
  • Secure payment options.
  • Discount coupon system.
  • Pick-up from restaurant option.
  • Reviews management system.
  • User-friendly checkout, placing an order, and payment process.
  • Advanced search functionality for quick searches.
  • Chat support and social media integrations.
  • Order history and confirmation.
  • Multiple delivery options.
  • Cashless payment choice/option to limit physical contact.
  • COVID-19 awareness Pop-ups and push notifications.
  • Menu management system.
  • Order Tracking.
  • Support and Assistance.
  • A built-in SEO features like URL structure, Meta tags, and description.
  1. Build the App/Website from Scratch: As mentioned before, building an app or website from scratch costs very high and is time-consuming. Building an app from scratch is only advisable when you are offering something new that cannot be built under customizations offered by the readymade solution.

Type of Mobile Apps

As an entrepreneur, you must be planning to develop your food ordering and delivery mobile app for both Android as well as iOS users.

If you are planning to start something similar to Uber Eats, here is some additional information related to mobile apps that might help you:

  1. Merchant App: The merchant app helps the restaurants/business owner to manage the restaurant details, menus, orders, sales, offers, prices, and other restaurant-related information efficiently.
  2. Customer App: The app for customers gives foodies the freedom to order food from their favorite restaurants. The app has all the restaurants registered with the updated menus and other information like price, ingredients, the option of customization, etc. displayed. The customers can place orders, pay for the delivery, and track the delivery of ordered food by using the customer app.
  3. Delivery App: The delivery app is designed for the delivery agents/boys who pick the orders from the restaurants and deliver them to the customers. This app has features like delivery agent profile management, delivery management, etc. The delivery agents will get a notification about the order; they can accept and decline the order using this app. Also, the app has features like google maps and the option to mark the status as available or unavailable to take the delivery. The final delivery status is also marked by the delivery agent using the same app.

Conclusion

Starting a food delivery business is a lucrative business idea. However, make sure that you choose the right food delivery app solution like Yo!Yumm or partner with a food delivery app development company to successfully launch your online food delivery business.

Published: August 2, 2021
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vinod janapala

Vinod Janapala

Vinod Janapala is Senior Product Marketing Manager at piHappiness - Customer Feedback Software. piHappiness is a top customer feedback software designed to collect customer feedback on Web, iPad & Android tablets. Vinod is keen on such topics as marketing, SaaS challenges, and Personal Growth.

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