Online Ordering for restaurants can be a big benefit, but there can also be some often misunderstood and hidden dangers for restaurant owners. While there is no doubt the statistics show online restaurant takeaway and delivery ordering is on the rise, what seems less clear is how this new trend is helping or harming restaurants increase their profit margin overall.
One of the biggest factors to consider in deciding to bring your restaurant into the online ordering arena is how much margin you can afford to pay for the exposure to new customers. Many of the biggest restaurant marketplaces charge a hefty commission for their services and not just the percentage they receive for the individual order itself.
Online Marketplace Costs and Risks
The problem with largescale online ordering services is that they charge a processing fee on top of the order commission. According to a recent report from CNBC, this can top out close to 30% for some of the biggest like Amazon Restaurants or 35% with UberEats! It's easy to see, high commission rates are a real issue in deciding to use an online marketplace service and this means it's just too expensive for many restaurant owners.
Another growing concern is competition. Largescale online ordering services like GrubHub are aggregators of food services and their model continues to grow in revenue every quarter. They utilize highly competitive sponsorship methods to help a restaurant attract more customers by bumping them to the top of the list, for additional fees. In this way, the aggregator could actually be harming a restaurant's potential gain of customers by offering incentives via competitors according to Business.com. The only way to keep up with the competition is to pay higher fees to bump your restaurant to the top of the pile. This can really add up and drain profit margins significantly.
However you slice it, online ordering is big business for restaurants and offering this service is an important business decision. Finding a way to offer good online restaurant service without paying a lot of commission is the key. Commission-free online ordering with Takeaway Solutions is the answer to avoiding competitive sponsoring and high fees for your restaurant's delivery service.
Having an online ordering strategy is only going to become more important to the hospitality industry and we recommend you put ‘having our own 0% commission’ at the top of the list so you can avoid becoming dependant on expensive commission based aggregators.