Why Restaurants are Straying Away From Third Party Delivery

Even before the Covid-19 crisis struck the world, many restaurants have already implemented some form of online ordering. According to a survey done by the National Restaurant Association, 60% of all restaurants and food service sales were takeout, drive-through, or delivery. As the food industry continues to transition with the mobile world, many restaurants are beginning to see the benefits of an in-house online ordering system despite the popularity of a third party delivery service.

The introduction of third party delivery services such as Postmates, Ubereats, Doordash, and Grubhub initially appeared to be a blessing for restaurants. When first introduced, these apps seemed to offer another source of revenue for just a small service fee. Fast forward just a few years later and many are starting to realize the flaws within the system. Here are a few reasons to switch away from a third party service and to create your own in-house online ordering system through a personalized website.

Third Party Services = Expenses

One of the main drivers of switching to an in-house ordering system instead of using a delivery service is the ability to drive away unnecessary fees. Using a third party service such as Postmates, Ubereats, etc. can be costly. While many restaurant owners originally saw these services as additional sources of revenue, they have also become an additional expense. Dominoes, one of the leading pioneers of setting up in-house delivery, has taken the strong stance against these third-party services, denoting them as “problematic”.

Restaurants pay these services 15% to 30% fees for each order, which is an absurdly large expense for any business to take on. When factoring in food costs, labor, and other expenses, having to pay an additional fee for using a third party service almost makes it pointless unless your margins are off the charts. Even so, it is good business practice to limit unnecessary expenses, which removing a third-party system can be categorized as.

According to a study done by the Middle, owners were asked the question whether they thought the commission fees charged by these third party services were fair?

 “84% of business owners said that the fees weren’t worth the result.

By moving towards an in-house online ordering system, these service fees charged by third parties can be eliminated. Without extra fees, you are then able to maximize revenue and growth. Converting to your own ordering system will save you money from paying out a middleman and place the money into your own pockets.

In-House Online Ordering Has Significant Advantages

Besides larger profit margins, many restaurant owners are switching away from third party delivery due to the advantages that come along with in-house ordering. Online ordering has significant advantages during this digital age and one way to stay ahead of the curve is to provide it through your own website, social media pages or app. As the world continues to modernize, your restaurant should do so accordingly. Not only will you eliminate a middle man, but you will also reap the benefits that follow suit of being able to grow your business digitally.

Customization

Housing your own ordering service allows you to make real time adjustments and customization to your items. These can vary endlessly from new items to deals and offers. Having control over your brand and the overall image can do wonders for the long term aspect of your business. Rather than have a third-party app throw in your menu and a few pictures, having your own website service allows for full control.

Another way an in-house ordering system can flourish is the business to customer feel. On a personalized website, you can add dashes here and there to say “thank you” or “we appreciate you”. A feature lacking on most third party systems. Customizing your website to appreciate the customer is a great way to not only say thanks, but to also build customer loyalty. Going through something like UberEats or Grubhub takes away from the restaurant experience, whereas having your own system can allow for a more personalized feel.

Less Mistakes and Quality Control

Most modern POS systems can provide an integrated Online Ordering function that will send new orders directly to your POS kitchen printers all while displaying order information on your POS screen. This will eliminate the need for double data entries which ensure order accuracy with enhanced speed.

Nobody likes a messed up order, cold food, or slow delivery. These are common problems when ordering through a third party and as a result, its your brand getting damaged for something that wasn’t even in your control. Providing your own service allows restaurants to keep a close eye on the services provided. You can take proper steps to serve food the way you want to deliver it, without risking losing a customer forever if a delivery driver somehow inappropriately mishandles the meal.

On average, third parties take 49 minutes to complete a transaction, where as with direct orders, the delivery time is cut down to 20 minutes (medium.com). The quicker you can get food delivered, the happier the customers will be. Why risk damaging the brand if you can control factors within house, while knowing the product you are sending out is in best form possible.

Conclusion

All in all, restaurants should be weary of the fees third party vendors are charging. Not only are these delivery services charging large fees in an industry where the slightest margins make astronomical differences, but they also lack control.

The benefits via an in-house online ordering system are certainly something to keep an eye on. As more owners in the industry begin to stray away from food delivery through a third-party, many have been able to maximize upon the benefits of keeping delivery in-house.

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