The same again. You get an invoice for listing your restaurant on the food ordering portal and you can’t believe you have to pay so much. Do these orders from the food portal ever really pay off?
In addition, the commission is being raised all the time. You don’t want to cooperate like this anymore, but you are afraid of what will happen if you lose your orders from the online channel. You have no alternative to the food ordering portal. What a horror.
Why exactly is this happening? What makes the cooperation that was to be your salvation prove to be such a considerable threat? Is it possible for you cooperate with a food portal and not go bankrupt? Let’s see.
Food ordering portal
Let’s clarify one issue; cooperation with a food ordering portal can bring really big benefits to a restaurant – especially at the beginning of its activity or right after launching food delivery.
This is because the food portal guarantees a large number of orders. For example, GrubHub or JustEat spend huge amounts of money to attract customers to their portals. That’s the point – to themselves. It’s a coincidence if they place an order just at your restaurant. It depends on the portal algorithm that positions you on the competition list.
Portals often reward new restaurants they work with by listing them at the very top. You are happy with the sales that have gone up and everything seems OK. Until you get the invoice. Then, it’s the food ordering portal that enjoys itself more.
Does the portal want you to sustain a loss?
No. The portal does not want you to sustain a loss. The portal wants to take benefits. Self-benefits. Look at the curve – it shows the size of the food delivery market in the US. This is huge money! Now imagine that the portal deducts its commission from this amount, which is usually about 15%. There is something to fight for, isn’t there?
The food ordering portal doesn’t want your restaurant to have as many orders as possible. It wants every owner of the restaurant they work with to have similar profits from the portal and be satisfied.
So, when your customer searches on Google for your restaurant and finds the link to the food ordering portal in the first position, it may turn out that they will choose a completely different restaurant. The portal is like a hypermarket, and your restaurant is only one product on the shelf. With dozens of alternatives around it!
What if someone actually orders from you? Of course, you give some of your profit to the portal. This is probably not even the worst part. The customer leaves the portal all their data with consent to marketing contact. You do not have access to it, and the portal can send such clients materials promoting your competition! Not very nice. Not very profitable for you.
What can you do?
First of all, when you decide to cooperate with a food ordering portal, you need to be aware of the risks it brings. Read the contract carefully and don’t sign it if the issues are not entirely clear. You can always consult with a lawyer.
Don’t prioritize the sales on a food ordering portal. Do not link to the portal in Facebook posts, remove the links on the restaurant website. If you don’t, you direct customers who are already determined to buy from you to the place where they meet your competition!
Show concern for the alternative. Run your own online food ordering system on the restaurant website or in the mobile application and direct your customers to it. This way, you will limit the amount of commission you pay, and you will always have an alternative if you want to terminate cooperation with the food portal.
An alternative to the food ordering portal will strengthen your negotiating position. Remember that it is not the portal that should dictate the terms of cooperation, it should be a business partner, not your boss.
Cooperation with a food ordering portal brings certain threats with it. A high commission gives sleepless nights to many restaurateurs and it’s growing all the time. When deciding to cooperate with the portal, set the limits that you will not want to exceed.
Never send customers who want to order online to the portal. This increases the amount of commission to be paid, and there is also a risk that the customer will order in another restaurant.
If you care for a genuine alternative in the form of online ordering on your restaurant website or in a mobile application, customers will be able to order online, and you will not pay high commissions. Try the UpMenu solution – you can test it for free for 30 days, then, all you pay is a small monthly subscription. No hidden costs.