Third-party restaurant ordering and delivery platforms command ridiculously high commissions. 30% or more in some cases. Here's how they justify it:
They source the customer. Although many consumers ordering through these platforms would order directly from the restaurant, they don’t. They would, if only it was easy and convenient.
The restaurant has less labor cost to service a guest who is ordering for pickup or delivery. A guest that is ordering for pickup or delivery results in less labor costs for the restaurant than a guest who is sitting down for table service. This holds true whether the customers order directly from the restaurant or through a third-party platform.
There's a real and very significant cost to perform delivery. Of course, that cost is significantly inflated by the one-to-one nature of third-party delivery. Each order requires a separate trip to the restaurant for pickup and delivery as opposed to sending multiple orders out for delivery together with a single driver (that would cost much less).
Business savvy restaurants are focused on turning customers who come from third-party platforms into direct connections. They continue to pay these profit-eating commission fees because they have discovered how to take advantage of the outreach these platforms provide. Make third-party platforms do the work for you and use them as vehicles to market your business. Put the spotlight back on your restaurant, so that your customers come back to you, rather than opening these apps. Here’s how:
First, they include a promo card with a deep discount in each order that comes in through a third-party platform. The promotion advertises a one-time discount (like 20% off) for ordering directly through the restaurant’s commission free online ordering system. How many customers are willing to pick up their order for a 20% discount? It turns out, quite a few. For the restaurant, providing a 20% discount almost always results in a net gain compared to the commissions being charged by the third-party delivery platform.
Second, they continue to incentivize customers to order online directly through the restaurant's commission free online ordering system. For orders placed this way, the restaurant inserts a promo card that offers an ongoing discount (like 10%) to continue ordering direct. Restaurants are realizing that their labor costs for online orders with curbside pickup are substantially lower when compared to dine-in customers. An ongoing discount to encourage commission free online ordering for curbside pickup makes a lot of sense.
Third, they utilize mobile commerce technology to digitally connect with their dine-in customers. In doing so, they have a better chance of retaining their customers within their commission free digital ecosystem, instead of losing customers to third-party platforms with high commissions. To do this, restaurants are implementing contactless mobile ordering and payment solutions where the customer can scan a QR code at the table, tap an NFC tag or simply browse to a website to view the menu, order and pay. For restaurants who find contactless mobile ordering and payments too progressive of a step for dine-in customers, they are turning to digital receipts as a highly effective way to digitally connect with their guests and deliver enticing promotions that encourage and facilitate direct repeat business.
PayLink® provides businesses with a powerful mobile commerce platform that helps restaurants and retailers take orders online, create and manage promotional codes and digitally connect with in-store customers.
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