If your shop is large enough to employ a dedicated delivery driver on the payroll, contract drivers, or a delivery service, how do you control your cost of the delivery labor?
If you hire out your delivery
If your shop uses only contract drivers or a delivery service who use their own vehicles and pay for their own gas and repairs, it is easier to control the cost if they are paid by the delivery. If the shop’s delivery charge is $10.00, the contract driver or delivery service should be paid no more than $8.00 per delivery. If a contract driver uses the shop’s vehicle to make deliveries, the pay rate should be around $6.00 per delivery.
In some states, a contract driver who uses the shop’s vehicle may be considered an employee paid as piece worker and is subject to Payroll Taxes and Worker’s Compensation.Your insurance company may also require all persons operating a company vehicle be listed on the insurance policy.
What if you keep a delivery driver on the payroll?
Delivery staff on payroll present more challenging costs to control. Drivers often spend a lot of time spinning their wheels, waiting for the shop to put together a delivery route. In addition, drivers leaving with only one or two rush or timed deliveries just before the cut-off time can be hard to control. While the driver is waiting, ask them to help out in design, restocking supplies and containers, or other tasks.
By managing your driver’s time, you can ensure they are able to help your shop continue running smoothly. This is especially important in the slow season when revenues are low; make sure your expenses stretch as far as they can to keep your business in the black.