Where should I deliver?
This is always a question when someone is starting out, and often a question for people who have been driving for awhile. Where is the best place to drive? Where is the best place to do my deliveries?
This is a critical question for being able to drive profitably. There are places that are better than others, and your choice of places to drive can make or break you. So how do you know where to go?
Getting started: Find places you are comfortable with
A week ago, in episode four, we talked about knowing your area. This is critical to your success. You want to get as familiar with your market as you can. This allows you to operate more efficiently, and it gives you confidence. There’s just something that makes you feel good when you know where something is without needing help. What did we do before GPS? Well, that would be printed maps from Mapquest… or the old map books…
If you’re just getting started and still a little intimidated by your market, go ahead and start in areas that you are comfortable with. Get to know the restaurants that deliver in those areas, open up the apps or websites for the platforms you deliver for and see who’s there. Start with your area and spread out.
Getting more comfortable: Find the busy places or hotspots
You will find that you’re forced to get to know some other areas as you go. Deliveries don’t always stay within a small region. That’s okay, you get to slowly spread out and slowly get more confident with other parts of town.
This is when you can start paying attention to things like the hotspots that some apps provide, showing where things are really busy. I don’t recommend hightailing it to those hotspots by any means, too often too many other drivers do as well and it’s saturated by the time you get there. But start familiarizing yourself with areas that are busier.
ESPECIALLY familiarize yourself with busy areas that have deliveries from higher end restaurants. The order totals are higher, meaning tips are usually higher.
From there, you can also start paying attention to if certain apps have incentives for an area. Sometims that area is just so busy that you can make good money. I only recommend heading to busier areas IF they are fairly close to you. Remember the 40 cent rule from yesterday – every minute you aren’t on a delivery is a minute you’re not earning money. Driving to another area is costing you 40 cents a minute AND 35 cents a mile or so. Is that other area going to pay well enough to make that up?
Going Ninja: Measuring the profitable areas.
Once you’ve gotten more familiarity with your total market, there’s one thing you can do that can really up your game. You’re going ninja here. You’re going full on geek here too, by the way. Geek-ninja!
What you’re going to do is start tracking how profitable each part of your market is. You’re going to do some delivery-specific market research. I talked a couple of episodes about tracking your progress, and one part of that can be to track every delivery. This is one way tracking every delivery can make a difference.
Choose which markets you want to measure
Divide your market up into a handful of zones. As you get to know your area, you have an idea what the major areas are. Maybe you’ll steal from the zones that an app like Doordash uses? Divide them up in a way where there’s similarity across a zone – you don’t want to mix downtown with a spread out suburb for instance – but do it so it’s easy to identify a boundary.
Start tracking individual deliveries, by market area
Now, start writing down the details of each delivery and what zone it was in. You can do this on a spreadsheet and sort by zones, or you can have several sheets of paper, one for each zone. For each delivery, all you need to write down is:
- How many minutes it took from the time you started towards the restaurant to pick up to the time you dropped off.
- How many miles for the same thing
- What you earned for the delivery.
That’s it. It’s that simple. Track these deliveries for several days. Try to get around, mix it up so you get a good mix of deliveries in the different areas. Try to keep your tracking within similar time ranges, such as during the busier parts of dinner rush. You don’t want to compare downtown deliveries during rush with a suburb delivery in mid afternoon.
Tally your results
Once you have several days worth of deliveries, do the following:
Add up all the numbers for each zone.
For each zone, do the following calculations:
Figure out your expense. What does your car cost per mile? If you’re not sure, go with 35 cents. It’s a pretty good bet it will be close to that. Take 35 cents times the total miles. Take your miles times .35
Figure out your profit. Subtract the expenses you just figured out from the total money you earned.
Figure out your profit per minute. Divide the total profit by total minutes. (and if you want to go further, you can then take THAT total times 60 to get profit per hour)
Compare your results
Now you have a profit per minute or profit per hour for each zone. How did they compare?
I will tell you that when I did this, I did not expect the results I got. I found that downtown was the most profitable area, some of the suburbs I loved were the worst. It all came down to efficiency, that downtown orders were usually much quicker and shorter, even with parking and traffic headaches.
Your area may well be different. There may be factors that make suburbs better in some markets and worse in others.
Identifying when it makes sense to drive to a profitable area
What do you do with this? Does that mean you just head to the profitable area? It depends really on how far you have to go. Remember the 40 cent rule, that every minute you aren’t delivering is 40 cents you aren’t earning. You have to ask if it’s better to pick up something closer and you’re working right away, or better to lose the 40 cents a minute and 35 cents a mile getting to another spot because you know you’ll earn enough more to make up for it.
Identifying when it makes sense to avoid a less profitable area
Where I use this information the most is more to avoid certain areas. There are a couple of suburbs now that I know not to get sucked into. If I get a delivery that drops off there, I either take it, drop it off and hightail it back to somewhere else, or I reject the order.
Make Business Decisions on Where
Best to Deliver
It really starts with first getting to know your market and getting a good intuitive feel for what areas will keep you busy, especially the areas that provide better delivery options. And then as you grow more comfortable, you might want to start tracking your individual deliveries as described above.
I was actually shocked at some of the results when I was tracking. I tracked for a longer time just to see if there were mistakes, and the results stayed consistent. I expected some suburbs to be more profitable just because they FELT more profitable. The payouts were higher and it seemed easier and faster to deliver because of lack of traffic. When I found that more congested areas were more profitable, I made the decision to familiarize myself even better with those areas.
In the end, where you deliver really is a business decision. It may be a decision based on comfort, and that’s okay. Driving in a market you really dislike can be like driving a car that is uncomfortable, it can discourage you from delivering longer. At the same time, challenging yourself to become more comfortable with some areas can open up opportunities. Find good areas to drive, but use common sense and things like the 40 cent rule to help you make good decisions on when it makes sense to head towards a particular area. The better you do at finding profitable markets, the better your success as a driver.