One of the concerns that the Dumpling Coaching Team continues to hear from business owners all across the country is how rising fuel prices are or may impact them within their delivery businesses. Although gas prices have come down slightly since the initial record-breaking spike in March of 2022, it is still a concerning factor for many of our business owners and experts expect that it may continue to be an issue for some time.
With that in mind, let’s go over some of the ways Dumpling business owners can mitigate this expense within their business.
Optimize Grocery Delivery Order Efficiency
Consider limiting the miles you are driving in your business by combining or pre-planning trips. You can encourage your customers to order from the same store at the same time as another customer. One of the ways to do this is by setting up Piggyback promotions* for your business (*This Dumpling feature is available for pro plan users, and you can find more information about it here). You can even consider encouraging customers (via text or your business social media channels) to order from stores that are further away during less traffic-heavy times (such as mid-day on a Thursday) or to combine their usual smaller orders into one larger order.
Lessen Your Delivery Zone Area
Consider limiting the number of zip codes you service within your business for incoming customers and be mindful of how far away any of your personal advertising efforts are being shown. If you are advertising in a Facebook group that covers a large region you can be specific in your posts about where you provide service or seek out a more hyper-local resource for now.
Gauge Community Concern About Fuel Prices and Offer a Solution
Although delivery professionals are heavily impacted by rising fuel costs, remember that many potential customers in your area may also be concerned. You can offer to run several of their errands while you are out, limiting their personal gas usage.
This is also a great time to remind those considering or already using your business that you offer in-store pricing and do not charge an annual membership fee. You have the flexibility, as a small business, to help them stick to their grocery budget by swapping out for the generic brands, using store coupons, or even shopping their order at lower-cost stores. Having a budget discussion as costs of food and fuel rise can help to build trust with your clients and really sets you apart from other services that may be more rigid or have hidden fees.
Keep Up to Date on Vehicle Maintenance
Experts say that the best way to improve your vehicle’s fuel efficiency is to keep up on all regular maintenance. Even something as simple as getting the oil changed on time and checking tire pressure can make a difference!
Pro tip: Save some of your earnings out of every order for these types of expenses so that you are able to do them as soon as you should
Take Advantage of Fuel Rewards Available to You
Many of your local gas stations (or grocery chains that have gas stations) have free rewards programs for their customers. Make sure that you are utilizing those, and even looking into ways to maximize your points for them when doing your own shopping. Keep track of when any rewards expire so that you can fuel up before you lose them.
Look into cost-saving apps like GetUpSide or Gas Buddy to see if any of them are a good option for you in your area.
Pro tip: The amount of driving you do within your business gives you the opportunity to always know which gas stations in your area are priced well. Plan ahead when you are getting low on gas so that you can fill up at a more affordable option in your area instead of the pump across town by your customer’s home that is 30 cents higher per gallon!
Should You Raise Your Delivery Prices, or Add a Fuel Surcharge to Orders?
Ultimately this is up to you to decide what works best for your business and your customers, but let’s go over what that may look like on either side.
If you are finding that increased expenses are harming your ability to do business, even after you have taken on cost-saving measures, raising prices can make sense, particularly if you were already priced on the low end. Fuel, groceries, and even housing costs are all at historic highs right now, and your best customers should be understanding of that and feel that you deserve to be paid fairly for your labor. Our suggestion here, if you choose to raise prices, is to raise them as little as possible and to make sure clients are aware before they see their final bill. Additionally, raising overall prices can leave a better taste than adding extra fees on a per-order basis.
With rising costs in mind, it is important to note that your customers’ cost of living may be on the rise as well. Keeping your prices the same can set you apart from other services, and keep you accessible to a larger number of clients (which can bring in a more steady income stream). If you have raised your prices in the last year or two, or are already priced well above other shoppers in your area, you can risk harming your client relationships. Another thing to note is that if you are on our recommended percentage pricing model your clients may have already felt an increase in their budget with your business, due to the grocery inflation over the last two years. This is where the conversation about the actual grocery budget can again be useful – there may be other tools at your disposal that lower their grocery cost (which would slightly lower your per order pay in the percentage model). There may be other expenses within your business that you are able to lower in order to keep pricing steady for clients.
If you have any questions about how to best price your services appropriately for both your business and your clients, the Coaching team is always happy to help. You can contact them within the Message Center in your Boss app and follow the prompts for ‘Contact a Coach”.