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50 Ways to Reduce Delivery Costs Without Sacrificing Quality

Small cost reductions add up to big savings. Here are 50 proven strategies to reduce delivery costs while maintaining quality.

DK
David Kim
Restaurant Success Manager
June 8, 2024
12 min read

The Cost Reduction Opportunity


Delivery operations have many costs:

  • Food costs
  • Labor costs
  • Packaging costs
  • Platform fees
  • Overhead

    • But most restaurants don't systematically reduce costs.


    They accept costs as fixed and focus only on revenue.


    But restaurants that reduce costs systematically see:

  • 15-25% better margins
  • $1,000-3,000/month in savings
  • More competitive pricing
  • Higher profitability

    • Here are 50 ways to reduce costs.


    Food Cost Reduction (10 Strategies)


    1. Negotiate with Suppliers

  • Get multiple quotes
  • Order in bulk
  • Build relationships
  • Ask for discounts

    • 2. Reduce Waste

  • Track waste
  • Improve inventory management
  • Better prep planning
  • Repurpose ingredients

    • 3. Optimize Portions

  • Right-size portions
  • Reduce over-portioning
  • Standardize recipes
  • Monitor portion costs

    • 4. Use Seasonal Ingredients

  • Buy in season
  • Lower costs
  • Better quality
  • Support local

    • 5. Substitute Ingredients

  • Find cheaper alternatives
  • Maintain quality
  • Test thoroughly
  • Update recipes

    • 6. Batch Prep

  • Prep during slow times
  • Reduce labor costs
  • Improve consistency
  • Better efficiency

    • 7. Reduce Menu Complexity

  • Fewer items = less waste
  • Better focus
  • Lower inventory
  • Simpler operations

    • 8. Monitor Food Costs

  • Track daily
  • Identify issues
  • Take action
  • Measure results

    • 9. Optimize Recipes

  • Reduce expensive ingredients
  • Increase cheaper ingredients
  • Maintain quality
  • Test changes

    • 10. Use Leftovers

  • Repurpose creatively
  • Reduce waste
  • Create specials
  • Save money

    • Labor Cost Reduction (10 Strategies)


    11. Optimize Scheduling

  • Right-size staff
  • Match demand
  • Reduce overtime
  • Better forecasting

    • 12. Cross-Train Staff

  • Multi-skilled employees
  • Flexible scheduling
  • Better coverage
  • Lower labor needs

    • 13. Improve Efficiency

  • Better workflows
  • Reduce wasted time
  • Optimize processes
  • Streamline operations

    • 14. Use Technology

  • Automate tasks
  • Reduce manual work
  • Improve accuracy
  • Save time

    • 15. Reduce Turnover

  • Better training
  • Competitive pay
  • Good culture
  • Lower hiring costs

    • 16. Optimize Prep

  • Prep during slow times
  • Batch prep
  • Reduce rush labor
  • Better planning

    • 17. Self-Service Options

  • Online ordering
  • Self-service kiosks
  • Reduce front-of-house
  • Lower labor

    • 18. Part-Time Staff

  • Flexible scheduling
  • Lower benefits
  • Match demand
  • Cost savings

    • 19. Performance Management

  • Set expectations
  • Regular feedback
  • Performance improvement
  • Better productivity

    • 20. Outsource When Appropriate

  • Delivery (third-party)
  • Accounting
  • Marketing
  • Specialized tasks

    • Packaging Cost Reduction (10 Strategies)


    21. Buy in Bulk

  • Volume discounts
  • Lower unit costs
  • Reduce ordering
  • Better pricing

    • 22. Negotiate Prices

  • Get quotes
  • Compare suppliers
  • Negotiate terms
  • Build relationships

    • 23. Reduce Packaging

  • Eliminate unnecessary items
  • Right-size containers
  • Optimize usage
  • Reduce waste

    • 24. Reusable Options

  • For regular customers
  • Deposit system
  • Lower costs
  • Environmental benefit

    • 25. Standardize Packaging

  • Fewer types
  • Bulk purchasing
  • Lower inventory
  • Simpler operations

    • 26. Quality vs. Cost

  • Balance carefully
  • Don't sacrifice quality
  • Test alternatives
  • Find sweet spot

    • 27. Packaging Alternatives

  • Research options
  • Test new materials
  • Compare costs
  • Maintain quality

    • 28. Reduce Waste

  • Proper storage
  • Inventory management
  • Use before expiry
  • Monitor usage

    • 29. Supplier Relationships

  • Build partnerships
  • Long-term contracts
  • Better terms
  • Priority service

    • 30. Track Costs

  • Monitor spending
  • Identify waste
  • Take action
  • Measure results

    • Platform Cost Reduction (10 Strategies)


    31. Negotiate Commissions

  • High volume = leverage
  • Ask for discounts
  • Compare platforms
  • Switch if needed

    • 32. Optimize Platform Mix

  • Focus on best platform
  • Reduce weaker platforms
  • Better terms
  • Lower overall costs

    • 33. Reduce Marketing Fees

  • Use promotions strategically
  • Track ROI
  • Optimize spending
  • Focus on what works

    • 34. Direct Ordering

  • Build own system
  • Reduce platform dependence
  • Keep 100% revenue
  • Lower costs

    • 35. Bundle Orders

  • Encourage larger orders
  • Higher AOV
  • Lower commission % on total
  • Better margins

    • 36. Optimize Pricing

  • Price for platform fees
  • Maintain margins
  • Competitive pricing
  • Better profitability

    • 37. Reduce Refunds

  • Better quality control
  • Accurate orders
  • Good packaging
  • Lower costs

    • 38. Platform Features

  • Use free features
  • Optimize listings
  • Better visibility
  • More orders

    • 39. Monitor Fees

  • Track all fees
  • Identify unnecessary
  • Negotiate
  • Optimize

    • 40. Customer Retention

  • Reduce acquisition costs
  • Loyalty programs
  • Repeat customers
  • Lower platform dependence

    • Operational Cost Reduction (10 Strategies)


    41. Energy Efficiency

  • LED lighting
  • Efficient equipment
  • Smart thermostats
  • Lower bills

    • 42. Waste Reduction

  • Reduce food waste
  • Recycle
  • Compost
  • Lower disposal costs

    • 43. Inventory Management

  • Right-size inventory
  • Reduce waste
  • Better forecasting
  • Lower costs

    • 44. Equipment Maintenance

  • Regular maintenance
  • Prevent breakdowns
  • Extend life
  • Lower costs

    • 45. Technology

  • Automate tasks
  • Reduce errors
  • Improve efficiency
  • Save time/money

    • 46. Process Improvement

  • Streamline operations
  • Reduce steps
  • Eliminate waste
  • Better efficiency

    • 47. Supplier Consolidation

  • Fewer suppliers
  • Better terms
  • Lower admin
  • Volume discounts

    • 48. Insurance

  • Shop around
  • Right coverage
  • Lower premiums
  • Better terms

    • 49. Utilities

  • Monitor usage
  • Reduce waste
  • Efficient equipment
  • Lower bills

    • 50. Continuous Improvement

  • Regular reviews
  • Identify opportunities
  • Implement changes
  • Measure results

    • Implementation Plan


    Phase 1: Quick Wins (Week 1-2)

  • Identify easy wins
  • Implement immediately
  • Measure results
  • Build momentum

    • Phase 2: Medium Impact (Week 3-4)

  • Medium effort items
  • Requires planning
  • Implement systematically
  • Track progress

    • Phase 3: Long-Term (Month 2+)

  • Strategic changes
  • Requires investment
  • Long-term impact
  • Continuous improvement

    • Measuring Success


    Track:

  • Total costs
  • Cost per order
  • Cost percentages
  • Savings achieved

    • Goals:

  • 10-15% cost reduction
  • Maintain quality
  • Improve margins
  • Sustainable savings

    • Common Mistakes


    1. Sacrificing Quality

    Cost reduction shouldn't hurt quality. Balance carefully.


    2. Not Measuring

    Reduction without measurement = unknown impact. Track everything.


    3. One-Time Focus

    Cost reduction is ongoing. Review regularly.


    4. Ignoring Customer Impact

    Reductions that hurt customers = lost revenue. Consider impact.


    5. Not Prioritizing

    Trying to do everything = nothing gets done. Prioritize high-impact items.


    Real Results


    A restaurant we work with reduced costs:

  • Food costs: 3% reduction
  • Labor costs: 5% reduction
  • Packaging: 10% reduction
  • Overall: 8% cost reduction

    • Results:

  • $1,200/month savings
  • 8% better margins
  • More competitive pricing
  • Higher profitability

    • Getting Started


  • Week 1: Audit all costs and identify opportunities
  • Week 2: Implement 10 quick wins
  • Week 3: Plan medium-impact reductions
  • Week 4: Implement and measure
  • Ongoing: Continuous improvement

    • The Bottom Line


    Cost reduction isn't about cutting corners—it's about working smarter.


    The restaurants that reduce costs systematically see:

  • 15-25% better margins
  • $1,000-3,000/month savings
  • More competitive pricing
  • Higher profitability

    • Start with 10 quick wins this week. Then systematically work through the list.


    For a restaurant with $50k/month in costs:

  • 10% reduction = $5,000/month
  • Annual = $60,000

    • Worth the effort? Absolutely.

    Tags

    cost reductionprofit optimizationefficiencymargins

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    DK

    David Kim

    Restaurant Success Manager

    David Kim leads restaurant success at Chowfly, helping hundreds of restaurants optimize their delivery operations and recover lost profits.

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