How much it costs to build a food delivery app and how to calculate its ROI?

By Rania Sep 10, 2020, 11:56:31 AM , In Mobile
How much it costs to build a food delivery app and how to calculate its ROI?

Food delivery apps became a thing with the huge acceleration of our lifestyles not allowing much time to cook and spreading laziness. Consumers became divided into two: those looking for a complete experience enjoying food, the view and like to spend time eating outside, and those who are in a hurry, sick, or simply tired just looking for a quick food experience where they don’t have to leave their houses.

Technology revolutionized the way the food industry works today and changed perspectives by providing new means of dining for at the comfort of one’s own house. When it comes to successful food delivery apps famous names like “Grubhub” “sweegy” KFC” “Mcdonalds” “zomato”…etc pop up in our mind The demand on such apps became huge as the world we know is run by mobile promoting the one-click lifestyle. Due to the global scenario of COVID-19, the taste of food experience changed as restaurants can no longer accept the same capacity and customers having concerns about the classic food experience. Thousands of restaurants suffered shutdowns due to long lockdowns pushing many to adapt to the digital era and upgrade their work with developing a mobile app.

When developing a food delivery app the main concern is

  • How much developing a food delivery mobile app can cost?
  • How to estimate and calculate its return on investment?

How much does it cost to build a food delivery app?

Project estimation is the second stage of any project development process. The cost estimation for any kind of project is carried out by technical Lead, Business analyst, and other experts. Software development is a complex process. It’s hard to build things that might seem simple. So it is calculated by defining visible milestones.

It is based on:

  • The project requirements
  • selected technologies
  • aimed user experience
  • planned features
  • Number of hours and people working on the project

It is to note the more details you develop the costlier it can go.  The total cost of basic features varies from one company to another. A simple food delivery clone can go from 5000$ to 50,000$.

It is recommended to opt for overseas companies mainly in India as they are known to deliver flawless products at very reasonable costs comparing to the market.

Here are some main features and their cost to consider

Registration & login

It is a must-have feature as the user logged in or register in your app When it is usually done through a social media platform or an email address.

Research tools

Food delivery apps must be flexible and adaptive allowing quick research for users food preferences

Payment and order process

The ordering procedure should be simple, fast, secure, efficient, and effective.  The delivery address and payment details are saved for quick checkouts.

Order tracking

Keeping track of orders builds trust between user and business as it helps users get to know the exact time of delivery and predict if their food is hot or not

Customer Support

The customer can directly use the app to get customer support regarding any query, like delay in delivery or items missing in the order refund issues, etc.

Smart assistance

AiML driven apps work to fasten up the process by suggesting options according to the user’s previous orders. It analyses the customer’s favorite cuisines and local restaurants and informs him about any promotions or reductions happening.

Review system

This feature allows customers to give feedback about a specific dish or restaurant after ordering. it is a very important feature it helps building notoriety for the ap services

Other cost Determinants

Selection of platforms

This refers to IOS and Android platforms.opting for a native platform is relatively less costly than going for a cross-platform app

Required deadline and team capacity

The cost varies if you are in a hurry!  The efficiency of the work depends on the number of people involved in the development process. It is obvious that the faster you want the app to be developed to you the bigger team it will require to work on it.

Type of application

The cost largely depends on the type of app you are aiming to build. There is a big difference between wanting to build a parent app like sweegy that does delivery for multiple restaurants. This kind of app is heavy, requires an annex app or integrated space for restaurants to register, and takes a more sophisticated research tool, and of course, way more time to develop it. Opposite to a simple in-house app for your owned restaurant that is simple has one user entry and requires less time to develop.

How To Calculate The ROI Of your Mobile App

Roi stands for return on investment. Developing an app is a considerable investment that is expected to generate considerable revenue. The revenue of your app or any app  is calculated generally calculated in the following way:

ROI in Mobile Apps

Let’s take as an example a food delivery app did cost 10000$ on building your mobile app. If it generates revenue of 20000$ then your ROI would be 100%. to explain this deeper we need to dig into how your mobile app can actually generate revenue

How food delivery apps generate revenue

Classic general ways possible for any mobile app :

The known  ways of  passive  revenue generation from developing mobile apps are:

  • Advertisement
  • Subscription
  • Transaction fees
  • Collecting and selling Data
  • In-App Purchases
  • Referral marketing

Read more about general app revenue models

Premium third party featuring

apps doing delivery for multiple restaurants generate easy passive income from ranking those restaurants. Of course the higher you pay the better you get featured on the app.

Delivery  commission

Delivery service is commissioned from both sides by the customer and the restaurant.

Premium  Subscription

Through the option of user subscription, the users can easily get special discounts from different restaurants along with free delivery.

Diverse delivery  Charges

Charges can vary per season(summer, festivals), method of delivery (fast delivery, regular ), weather (rain, thunder ), or additional charges for extra distance or change in the delivery address.

To give a clearer vision Let’s give us an example of a famous app like UberEats: a cross-platform app means active on both AppStore and google store, it is a parent app doing delivery for multiple apps and groceries stores. It has all the features mentioned above adding to that option of taking multiple orders from different restaurants in one delivery and also a review and rating system.

The company generates tons of revenues through a win-win system of not taking commission unless the order is delivered, their delivery charges are minimal attracting thousands of customers per day. it can go from   7-15% as services fees. That increases up to 35% in rush hours or bad weather.

At the end here are Some important points to keep in mind to choose your app development partner :

  • They should never quote projects with unknown deliverables
  • They only give budget estimation once the idea and needed requirements are finalized.
  • you must conduct needed market research and analysis because they can’t visualize the basics of a project from scratch in your place
  • Contract Agreements and Project Setups are a must to make your experience on the best terms possible.

Why choose IndiaNIC?

With our years of experience, we came to determine real market needs and design tens of successful delivery apps and various on-demand models aligned with the best and latest possible features on the market and perfect combo and UI/UX to keep your clients never fail to return back. We customize and develop uniquely each and every solution according to the well-analyzed customer inquiries.

Check our Project portfolio

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