As a result of the pandemic, restaurants have found themselves dependent on take out and delivery services. For some restaurants, it’s their only source of income. In order to make themselves more accessible, restaurants have turned to third-party delivery apps to make ordering and delivery easier for customers. However, some operators have found that the cost of third-party delivery service has hurt their business rather than helped it.
In a time when profits have decreased, the last thing foodservice establishments need is another cut in profits. To help you determine whether your business can afford a third-party delivery service, read on to learn more about delivery service fees and services.
How Much Do Food Delivery Apps Cost?
Many restaurateurs don't realize that third-party delivery apps charge hefty fees for restaurants. The cost can be typically between 15% to 30% of the total order price. To find out exactly how much a food delivery platform will charge, you would have to get in touch with them. For most of these delivery apps, there is no flat price. Instead, they work with the business owner and figure out what services the operators wish to use. The cost can also depend on where you live, as more and more states are placing pricing caps on delivery apps to protect restaurants.
What Services Do Food Delivery Apps Offer?
Many delivery apps offer a wide range of services designed to make orders, order processing, marketing, and delivery easier for all parties involved. Some apps include services and fees such as:
- Activation fees
- Tablets, mobile phone, or fax to keep track of orders
- Restaurant software
- Professional photoshoot
- Independent drivers, bikers, or walkers
- Fees for courier wages, background checks
- Fees for insurance
- Credit card processing fees
- Customer support
- GPS tracking
- Status updates
- Advertising
Many operators opt to use these services as they can help increase sales, but the extra cost for these services can add up to a large sum. This is why you should always thoroughly review an app’s service fees before making any purchasing decision.
Tips For Cutting Costs
While delivery apps offer many services that can prove to be advantageous, one of the best ways to save money is to avoid purchasing extra services you don’t need. For example, if you have your own delivery driver, you don’t need to be connected with independent drivers.
Delivery App Alternatives
You can also look for delivery apps that are less popular but more affordable. There are some apps that offer services for a flat monthly fee. However, the most economical way to offer delivery services would be to avoid apps altogether and set up your own delivery service through your website or have customers call in their orders. Keep in mind that running your own service means that you will be responsible for wages, fuel reimbursements, insurance, and vehicle maintenance.
While this might seem like a lot, many operators offset these expenses through the use of a flat fee per delivery that goes directly to the restaurant. This will always be a cheaper option than using a delivery app, but you must make sure that customers are aware that they can order online or by phone.
Covid Relief Programs
If you are experiencing hardships, a reliable option would be to take advantage of relief programs offered by delivery apps. The unprecedented events caused by the pandemic have had delivery apps reducing or waiving marketplace commission fees in order to help struggling businesses. Take advantage of these programs while they are still available.
Do Food Delivery Apps Really Help Restaurants?
There have been a lot of conversations about whether delivery apps actually help restaurants. Fees can get so high that they can take up to more than half of sales revenue. The fact of the matter is unless third-party delivery service fees drop to 5% or 10%, they will never be truly helpful to small or independent businesses. Unfortunately, many operators are not aware of this until it is too late because they initially assume that they are getting fair treatment. The reality is, many restaurants have expressed their frustrations with delivery apps and are spreading the word. Due to the unforeseen costly expenses, the most experienced restaurant owners are encouraging their peers to run their own delivery services.
