Restaurant Owners, Online Platform/App or a Custom Solution? Pros and Cons during COVID-19

Due to the situation going on around the world, restaurant owners are struggling to keep chairs filled or are flat out not allowed to keep the doors open during this pandemic.

Many countries are still allowing you to deliver food which is great news! The question many restaurant owners now face is whether they should sign up to one of the online platforms that allow you to list your menu and receive orders while they take care of the delivery side of things. Such platforms include Uber Eats, Foodora, Wolt and many more.

Delivery platform pros and cons

Pros:

  • Logistics are taken care of
  • A pool of potential customers
  • Fast deployment
  • Cost-efficient short-term

Cons:

  • Limited options and opportunities
  • No alcohol allowed
  • Expensive commission, 20-30%

Obviously the biggest advantage of joining one of the platforms is them taking care of the logistics of delivering food while you can keep doing your thing. It also lets you into a pool of new potential customers and as a bonus, it’s very easy to join up.

This is where you should be careful though. Uber Eats commission for every delivery is a whopping 30% and considering average restaurants profit margins are around 22% or over, at least according to this Chron article, it means that you need to have big enough margins to be able to make it profitable. Another thing to consider is that you aren’t allowed to sell alcohol with any of the orders, which is a big loss for restaurants. At least here in Finland, that’s how a big chunk of their profit is made.

You also have very limited opportunities for marketing, branding and other options such as loyalty programs inside the platforms which in contrast, is possible with a custom solution.

In conclusion

If your profit margins allow it, it’s a wise choice to join one of the delivery apps to keep the doors open short-term, but I would suggest starting to explore options to have your own custom solution in place for the long term. While it means you have to have your own logistics in place but you’ll have a lot more options regarding that and be more cost-efficient.

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