Who doesn’t like to have hot and spicy foods every now and then, especially after you come home from a long day at work? But cooking it yourself, especially at the end of such a long day is cumbersome and that’s why the food delivery app business has been booming so much in the last couple of years. Almost every other organization is either opening its very own food delivery business or at least investing in one. So, if you are thinking about getting into this business, now’s the time, but how does the food delivery business work? Let’s find out.

How Does The Food Delivery Business Work?

The online food delivery business works as an intermediary that links the people who want food to restaurants that provide food. The food delivery app is a platform where people can search for their favorite dishes or restaurant and order them. The platform will then alert the restaurant about the order and at the same assign a delivery agent who will be responsible for delivering the food to the customer.

Once the food is ready, the restaurant pings the delivery agent who is assigned to the task and he will then accept the order and deliver it to the customers. All in all, it takes about 20 – 40 minutes of time depending on the distance between the restaurant and the customer. If the food is good and the customer is satisfied, then he may just order again. As for the app itself, there are various food delivery app development companies who will happily work for you.

What Are The Three Main Stakeholders?

There are three major stakeholders in the business model and they are-

Customers

Customers are indeed one of the main stakeholders as they are the ones who order the food, pay for them, and even review the food, restaurants, and even the delivery agents.

Restaurants

Restaurants create the menu and are responsible for maintaining the food quality, which in turn will get them fame and more importantly customers, who will repeat orders from them.

Delivery Agents

Delivery agents also have a hefty responsibility as they are the ones who deliver the food on time. If it’s not delivered on time, customers could get upset and the food itself will get cold.

How Do You Earn Revenue?

The food delivery app companies earn revenue through four main channels. Let’s take a look.

Commission Charges

Roughly about 10 – 18% commission charges are provided to the food delivery app business for every food sold on the platform. The percentage varies from app to app and restaurant to restaurant.

Subscriptions

In order to attract more customers, food delivery app businesses often provide higher discount rates and other benefits, if the customers pay a small fee to sign up for a subscription.

Ads and/or Sponsorship

Ads provided by the restaurant or any other business can also be used in the app. This can bring in some heavy cash flow as the ad business is one of the largest businesses in the world.

Delivery Fee

For every food delivered, there is usually some delivery fee, which also contributes to the revenue.

How to Get Into Food Delivery App Business

Well, first of all, you will need a food delivery business plan. Then make some calculations of the operating cost and how much you will need to invest or to get funding. Then legally establish your business, and get a license and permits. Then, you will have to build different teams who will each have their responsibilities, including how to develop the food delivery app and how to connect to restaurants. There are dedicated mobile app development companies who can build the app for you. It will take some time, but you will get there.