Using Scheduled Deliveries to Avoid GP Charges and Support Khon La Krueng! Revealing the Success of a Public-Favorite Seafood Restaurant
Aug 31, 2021
"Due to the impact of COVID, our sales have been great. As a result, we had to hire more people." We didn't expect to receive such an answer from "Khun Noon – Karuna Sri-ampan", owner of the Seafood Aroy Delivery Restaurant. When asked about the impacts from the COVID-19 situation, with consideration of the fact that almost every restaurant has been negatively impacted by the crisis, it turns out that this restaurant can actually be said to be "moving up". From our conversation with the owner of the seafood restaurant, we learned that it started out as a small home kitchen that eventually grew into a favorite seafood delivery restaurant.
So, we discovered that, for this case study of the Seafood Aroy Delivery Restaurant, a method for scheduling deliveries is employed to avoid GP charges while also supporting the Khon La Krueng Scheme, which should be beneficial to quite a few restaurants.
From a Home Kitchen Hobby to a Public-Favorite Seafood Delivery Restaurant
The Seafood Aroy Delivery Restaurant has been open for about 7 years. Initially, it started selling as a hobby. I had just received my master's degree and didn’t want to start working a regular job yet. And my mom had a seafood stall at the OTK Market, so I picked up seafood from my mom to cook and sell. Initially, I started by doing things in a 2-bedroom condo. The kitchen wasn't very big, even the gas that was used came from a small canister. At the time, I only sold Crab with Khanom Chin Namya Pu, and it got a great reception. So, after selling just a few sets per day, I began to sell several hundred sets per day, to the point that there wasn’t enough space for me to keep selling from the condo. As a result, I had to expand by renting a building. However, the same format was retained. That is, food was only sold for delivery, and there was no storefront for sitting and eating."
"Later on, other dishes like Goong Pao, Ganchiang Pu and other dishes were developed gradually. Now this restaurant has dozens of menu items, and everything is made with seafood ingredients obtained primarily from the production source in Surat Thani, although ingredients are also sometimes sourced from other provinces. Over the 7 years since the restaurant opened, we moved from the first building we rented to another place, because sales kept improving and we kept having to expand our production to the point that we now divide work into departments like the grilling department, the stir-frying department, and so on. As for whether or not we were impacted by COVID, the answer that is our sales have been really good. We sold so well that we had to hire more people.
From starting out from just a few people cooking only a few menu items for sale, Khun Noon gradually expanded the business, and now there are almost 10 people working as part of the kitchen team. Every day, Seafood Aroy Delivery delivers great taste with a volume of at least 60-70 orders on average. If you visit the restaurant's Facebook page, you’ll find that the restaurant has over 5.6 hundred thousand followers! As we wondered about what the factors for this restaurant's success and the large numbers of followers were, Khun Noon, as the restaurant's founder, gave us the following answer:
"Our restaurant was well-received likely because of food quality. For example, for crab, we only used chunks of crab meat. Importantly, they are fresh, and we don't have to keep anything in stock. This is because I get ingredients from my mom, who already has a stall selling food at the OTK market. She hardly makes any profit from us. As a result, the Seafood Aroy Delivery Restaurant stands out for its selling of seafood that's sourced freshly daily, whereas other restaurants might stock their ingredients and not get them fresh daily. That's a major advantage of the restaurant."
Khun Noon said that one of the things Seafood Aroy Delivery Restaurant emphasizes the most aside from quality is punctual food deliveries. The restaurant uses a scheduled delivery method, by which customers are talked to first to let them know that the food will be prepared shortly before its delivery time to ensure that customers can eat while the food is at its most delicious stage. For example, if the scheduled delivery time is 2:00 pm, we will tell them that the food will be delivered from around 2:00 pm to 2:30 and not any later, and if an accident or something happens to cause a late delivery, we immediately call and inform the customers. However, those cases are very rare.
The Advantages of Seafood Aroy Delivery Restaurant
1. No storefront for sitting and eating -Fresh seafood is sold by scheduled deliveries.
2. Emphasis on punctuality – The food will be prepared only shortly before the delivery time to ensure that it tastes the best by the time it reaches the people who will eat it.
3. High-quality fresh seafood ingredients – There’s no stock to worry about. Instead, ingredients are supplied day by day. Some seafood ingredients even arrive while they are still alive. Moreover, a lot of meat is provided without holding anything back.
4. Inexpensive relative to quality – Food here is in fact cheaper than many other seafood restaurants, since the owner's mother has a stall for selling seafood in the market, which causes cost to be lower than other restaurants.
What online marketing activities were carried out to attract over 5.6 hundred thousand people?
Khun Noon said that, since the launching of a page in the beginning when the restaurant was opened, a part of the budget was spent to promote the page and existing posts. Luckily, the Facebook advertisement rates at the time were fairly low. So, a customer base was gradually formed, and trial and error led to knowledge about the effective techniques for the restaurant, such as the offering of set menu items and promotions and the changing of menu items from day to day.
"We were willing to spend on online marketing from the beginning from when advertisement costs were still fairly low. Then we gradually formed our customer base who followed our page. Now the advertisement rates have gone up quite a bit, so newbies might have a hard time. However, even now we are still willing to pay for advertisements, because one advantage of Seafood Aroy Delivery Restaurant is that we change menu items daily and do not repeat the same menu items over and over. For example, if something runs out today, we have to promote a new menu item to let customers know the next day. In addition to our page, we also have an official LINE account, which we also have to pay for. However, like we said earlier, because we have been doing this for a long time, we have quite a lot of followers and an established customer base, so not much has to be spent on promotions.
Sales techniques boost sales and customer base while also promoting word-of-mouth publicity
1. Changing Menu Items and Promotions Daily – Since menu items are not repeated in any week, customers don't feel that things are repetitious, so regular customers can order frequently. Additionally, changing menu items daily also cause customers to keep monitoring the restaurant's page to learn which menu items and great promotions will be offered each day.
2. Set Menu Promotions – This allows customers to eat seafood to their hearts' content. Although it might be more expensive to order standalone menu items, set menu items are more cost effective. Each day, regular customers diligently monitor us to see which interesting set menu items are offered. This is because set menu items also change from day to day.
3. Special Discount Promotions – Each day special promotional discounts are offered, while the full price might be higher than the promotions. Special promotional discounts are also rotated every day. Moreover, customers who discounted menu items might also order other items not being promoted. Therefore, this is an effective way to attract customers.
4. Buy-1-get-1-free – This promotion is a magnet for boosting sales. Each day, the restaurant will come up with 1-2 standalone dishes for the buy-1-get-1-free promotion in a regular rotation. After customers order them, they might also order other menu items.
5. Daring Highlight Promotion – The buy-1-get-1-free promotion for 1 kilogram of grilled shrimp is very popular. The restaurant only uses live shrimp directly supplied from a regular supplier. When asked why the restaurant was able to offer this daring promotion, the restaurant revealed that this promotion doesn't put much emphasis on profit but instead on high sales volume. The benefit is that it’s promotion other restaurants might not dare to offer. Because this promotion stands out, it helps promote word-of-mouth far and wide in addition to boosting sales. It is a highlight promotion that customers love and which led the restaurant to find success and become known much more widely.
Moving up during COVID & Use of Scheduled Deliveries to Avoid GP Charges
"One reason we were not impacted by COVID-19 in the same way as other restaurants is that, from the start, we were a delivery-only restaurant. Because we don't have a storefront, we also don't have to pay rent for it, and we don't have a big regular staff. As we cut out the storefront issue, the restaurant was able to avoid the many impacts that many other restaurants received from COVID. It instead became an opportunity to improve our sales. This is because people are working from home and need to order deliveries for eating at home and restaurants that used to be open for customers to sit and eat had to shut down. As a result, this gave an opportunity for businesses that are delivery-only from the very beginning like hours. With our large existing customer base and the quality of what we feed our customers, they trust us and already buy regularly. So when this situation happened, customers missed us more and we gained a lot of word-of-mouth reputation. For the most part, it is the customers that recommend their friends to become our new customers.
"Why did we decide to sell with scheduled delivery times? We actually used this method from the very beginning. There was a time when we tried delivery apps as well, but we rarely use them now. This is because the GP charges are way too high and their services did not add much to our sales. Like we said, we do sell well, but we don't focus on making a lot of profit, and if we have to deal with a lot of GP charges, we'll definitely suffer losses and would have to raise our prices, which will make things more expensive.
For example, we normally sell fish at 300 baht per fish. However, if we sell through an application, we would definitely have to sell at 400 baht per fish, and customers will still have to pay delivery fees, which makes things more expensive for them. Then problems about competition with other restaurants will occur. From our perspective, we thought that if customers bought directly from us and paid for mask expenses, things wouldn't be very different, so we decided that it would be better to have customers order directly from us. The delivery costs are roughly the same, so it became unnecessary to sell through any app aside from Robinhood, which does not have GP charges and which offers affordable delivery costs. So our customers were very interested, and one benefit of doing this is that it became possible for us to sell things more cheaply than other restaurants while still retaining food quantity and quality."
"So we focused on selling with scheduled delivery times to avoid GP costs. Some restaurants have pre-orders stretching over several days, but ours is different. Customers order only 2-3 hours ahead of time, and we have 5-6 riders that rotate to pick up and drop off products all day long. They are not our regular employees, but they are riders that we regularly rely on. Some have been working with us since when the restaurant first launched. They made trips for us all day long, and deliverers get all the delivery fees, so the restaurant doesn't pocket any of it.
Let's say a customer makes a call to the restaurant for a delivery and provides the coordinates for the delivery. We would calculate the distance and then charge a fee of 10 baht per kilometer. That is, the restaurant informs customers first about their delivery fees to ask whether it’s convenient for them, as this prevents later problems; this is something we're very serious about. Then we include the delivery fee as part of the price of the food for customers to make their payment. At the end of the day, we clear with the riders. We do this regularly every day.
Benefits of Selling with Scheduled Delivery Times
1. Avoid GP charges and sell at lower prices without reducing quantity or quality and while improving competitiveness, since the restaurant can sell more cheaply than other restaurants that sell through applications, which have GP charges.
2. Deliveries can be made on time as desired by the restaurant and customers.
3. The correct menu items desired by customers are provided. If customers do not schedule deliveries in advance but want to eat right away, some menu items might be out when they make their orders.
4. Quality deliveries are made due to excellent food care by regular riders. In addition, it's possible for use to remind them about their manners, and if cases involving mistakes or poor feedback occurs, we can directly deal with the riders. On the other hand, if the riders from the applications are employed, we might keep receiving customer complaints.
Tips for Restaurants Intending to Sell with Scheduled Delivery Times
● Start simply such as by talking to motorcycle taxis at soi entrances. The Seafood Aroy Delivery Restaurant itself started out this way.
● Come to an agreement about prices in a way that everybody wins, whether it’s for ourselves, the riders, or our customers. Don't push the riders’ hiring rates to be too low. For example, one trick you can use for selling with scheduled delivery times involves making a deal with some riders at rates for their services throughout the entire day to cover how many hours and the distances they need to cover and to ask them whether or not they think they can handle it. For example, they can be hired for the whole day for a rate of 600 baht per day with an agreed upon number of kilometers they can cover.
One benefit is that we might create delivery discount promotions to help cut the restaurant's delivery costs. What’s more, we can arrange for delivery times to be close to each other to allow riders to deliver multiple orders at once. And if it exceeds the agreement we made, we can take a look and see how much more money should be increased to be appropriate for the riders. In other words, the riders might earn a little bit less per trip, but they might earn more from regular work with us, and the rates are still acceptable for them. Overall, although they have to run more trips, they end up earning more, and everybody wins in the long run.
Share Some Frequently Encountered Problems
"Customers complain about expensive delivery fees. Customers who order are sometimes located far away, so it’s natural that their delivery fees go up. Our restaurant is located in Bang Kruai, and the customers are located along Rama III Road, and we charge the regular rate of 10 baht per kilometer. No matter what, it’s going to be expensive for them for the long distance to be covered. As a result, some customers who place orders from far away complain, but that's something we have to put up with. There's nothing we can do about it. We can't say, 'If you don't want to pay high delivery costs, then go ahead and order from somebody else nearby!' We try to let them know that it’s okay if they think the delivery fees are too high and that they can come and pick up deliveries at the restaurant. Some customers understand and opt to pick up orders at the restaurant. This is a regular problem, but we can't do anything about it."
However, some customers do go for the high delivery fees. We understand one another, as the restaurant can't push the rider rates down and long-distance deliveries have a risk of high delivery costs as well as whether or not the food will be delivered safely to customers and still taste good after delivery. Sometimes a round trip can be as high as 100 kilometers, but we don't have any issue with that. If the customer wants to pay for the delivery, they can order. Sometimes, however, we also offer free delivery promotions for the first 10 kilometers, followed by the restaurant covering half the cost of the next 10 kilometers, to boost sales and allow customers to profit as well, but this has to really be on some special occasions such as New Year. As said earlier, the restaurant gets nothing from delivery fees, So, if such a promotion were to be offered, the restaurant will have to pay the riders the difference on behalf of the customers."
Customers love to use Khon La Krueng benefits offered to boost sales, but there are management problems.
The owner of the Seafood Aroy Delivery Restaurant also said that in the beginning the government issued a policy for the public to be able to use Khon La Krueng benefits. It was a great way for restaurants to boost sales. It was also very convenient. However, recently problems surfaced that required urgent solutions.
"In the beginning, it was possible to use Khon La Krueng benefits with many different mobile devices. So, we let customers scan from the phones of any of our riders. It was really convenient. Later on, the rules were changed, so one restaurant could scan with just three devices per day. That created problems for us, since not every one of our riders could handle scans. We had to solve the issue by rotating devices. For example, at any time when large numbers of customers wanted to use their benefits at the same time, it would be problem that we had to manage, and since only three devices could be used at any given time, some devices had to be brought in and others had to be removed. The policy also limited us to requesting OTPs for only three days per time. This is creating a huge problem right now that requires more management."
"Our solution is that any customer who says they would like to use Khon La Krueng benefits, the customer will be asked to wait for a full hour instead of the previous half-hour delivery trip. For example, if an order was made at 11:00 am in the past, we would say the customer would receive it around 11:00-11:30 am, but if the customer wanted to use Khon La Krueng benefits, the customer would be asked to have the delivery time stretched from 11:00 am to 12:00 pm to give us time to rotate devices and solve the problem on the spot. Sometimes accidents occur and cause delays, but we immediately notify our customers when something happens."
As for people who run into problems in dealing with GP charges, Seafood Aroy Delivery Restaurant also recommends that it might be a good idea to implement a scheduled delivery system, but the system has to be adjusted appropriately for the restaurant. Importantly, neither punctuality nor sincerity with customers can be overlooked.