Consumers, restaurants, and large-scale buyers have become accustomed to the convenience of ordering food online and having it delivered. Where offers used to be sent via Excel lists or PDFs and orders placed by phone or email, today orders can be made in online shops and through apps.
The new technological possibilities have not only optimized many processes, but their use has also become vital for survival due to the current staff shortages, not just in the food industry.
If you want to set up your own delivery service or digitize your existing business, there are numerous factors to consider. In this first step, we will focus on what is needed to set up your own shop and deliver food. We will cover topics that apply regardless of whether you deliver yourself or use a logistics partner, whether you're a producer, a delivery service, a farm shop, or a wholesaler. We will also discuss common mistakes often made in the beginning and explain how to avoid them.
Define the target group
Before starting to build a food delivery service, it is important to define your target audience. Think about which customer groups you want to reach, how to reach them, and what their needs are. Clear communication with your customers from the beginning will make marketing much easier and help you stand out from your competitors.
Common mistake: vague customer targeting. Don’t be the “shop for everything.” Your customers want to know what you stand for, how you differ from the competition, and why they should order from you.
Tip: If you still want to serve different customer groups with various product ranges and prices—such as private and corporate clients with different minimum order values, unit sizes, and prices—you can easily set up two shops using Muli.
These shops can offer different or the same products with tailored customer communication, all integrated into the same inventory management system and processed in a single delivery and packing process. The management of both shops is done through a unified backend, ensuring no additional workload.
Create a business plan and determine the product range
Next, you should create a business plan that outlines your goals, products, pricing, and delivery methods. If you have your own resources for deliveries, it can be very helpful for future success to initially carry out deliveries with your own staff. This way, you get to know your first customers and can receive direct feedback on what can be improved and what products your customers want.
When starting out, it’s important to define a product range that is sufficient but not too large. In this context, the question of sales units also arises. Keep in mind that smaller sales units significantly increase picking costs. It’s crucial to find a balance between customer preferences and economic considerations.
Common mistake: starting with a product range that is too large. This leads to high initial investments, storage costs, and significant waste due to spoiled goods. First, get to know your customers, see how the product range is received, and most importantly, talk to your customers about what they want. You can then gradually expand the product range based on customer preferences. At the start, it is also advisable to offer no more than one unit size per product. The more varied the units and types, the more complicated and error-prone the packing process becomes. The product range should only be expanded once the picking line, packing, and quality control operate mostly error-free. A good benchmark here is less than 5% customer complaints.
Tip: Testing. Once your delivery service plan is in place, it's best to test it before making any major investments. A Muli-shop can be set up within 1-2 weeks, and orders can start coming in. Whereas previously, a shop had to be set up by an agency, and integrating inventory management and customer management systems was a tedious process before even the first order could be placed, Muli allows for a simple setup without high initial investments or long-term contracts.
Start by having friends and family place orders to test the entire digital process. Then, invite your first real customers to test the shop and place initial orders. While processing these first orders and making deliveries, you’ll gain valuable experience before officially launching. You’ll learn how long it takes to pack an order, how many orders you can handle with the available staff, how long delivery takes, and how many customers you can realistically serve with your current capacity. Based on these insights, you can adjust your plan and cost calculations as needed. Only make larger investments, such as in warehouses, equipment, or staff, after testing your idea with real customers and successfully delivering your first orders. Speak with your early customers—they will provide valuable insights into what they want and how best to meet their needs.
Once you have gathered initial insights from the test phase, adjust your business plan. In this phase, the following key metrics should be identified:
How long does it take to pick and pack an order, and how much staff do I need for it, or what is the cost of packing an order?
How long does it take to deliver an order?
How much money do I need to invest in advertising to acquire a new customer?
Define delivery area
Define a delivery area where you want to start delivering to your customers. Do you already have existing customers in that area? Where are most of your current customers located, or where are there many potential customers you can target? Could you potentially work with pickup stations to serve your customers?
Common mistake: At the beginning, the delivery area is often chosen too large, in an attempt to reach as many customers as possible. Keep in mind that whether you deliver yourself or use a logistics partner, the stop density is the critical factor for the profitability of your delivery service. The longer it takes a driver to get from one stop to the next, the less you earn from each delivery. This is especially true for delivery services or direct marketers delivering to end customers, who typically have smaller order sizes compared to restaurants or other retail businesses.
Tip: Start with the smallest possible delivery area during the test phase and avoid expanding it too quickly. Don’t schedule too many delivery days, and don't define delivery time slots too narrowly in the beginning. With Muli, you can easily add or remove postal codes and delivery windows, shift or pause delivery days, and notify your customers of these changes directly from the system.
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