8 Ways to cut your third-party ordering fees by 90%
Third-party ordering services like UberEats, DoorDash ,and GrubHub provide restaurants with excellent options for marketing their location locally and growing their reach. However, no matter what third-party ordering company you use, they all take a cut, usually based on a percentage of the sale. For example, Ubereats routinely takes 30 percent of your transaction. If your restaurant is popular, and especially if you tend to have a high check average, this adds up pretty quickly.
When you crunch the numbers, you’ll likely find that what you’re paying out takes a big chunk of your hard-won profits. In an industry that is known for its challenging margins, you want to be sure you’re keeping every penny in-house if you can. Of course, third-party ordering services do have their advantages. But – and there’s a big but here – you’ll have to give up some precious assets for the privilege. But we’ll get to that in a moment.
Third-Party Ordering Pros
Let’s first look at the pros of third-party ordering:
- They provide marketing support and advertising on their platform. This is attractive because people who see your listing or add are already looking for you. It’s like selling icebergs to polar bears. They already want you, and that’s nice.
- They take the pain and labor out of take-out and delivery orders. Your staff is free to serve the customers in front of them and all you have to do is have the food ready when they arrive.
- You can use your own delivery drivers if you like, keep the revenue in-house, and keep your drivers busy.
- You will benefit from a higher volume of business. This aspect is especially attractive if you are a brand-new business without a following. Collect a few good reviews, and you’ll build a loyal clientele quickly and effortlessly.
- It’s a way to build credibility. If you’re on a third-party network, it raises your visibility.
Third-Party Ordering Cons
But—sigh—as with every gift horse, there are a few caveats to consider. Let’s have a look at the dark side of third-party ordering:
- The customers you gain are not yours. At least, not really. Any business you gain will be the third-party’s clientele. They retain the customer data. They have the marketing outreach. Your business, all your efforts – essentially, you’re just handing it all over to them.
- You can’t promote directly to customers on their platform. Third-party platforms retain all customer information and can market directly to them. They promote other restaurants, fueling the competition. You don’t own your customer data, and you can’t communicate with them. That’s just sad.
- You have no control over your delivery and food handling. For any restaurant, from coffee shops to fine dining, your success depends on the quality and integrity of your product. If a customer is displeased with the service, it may be completely out of your hands. While you can easily make things right with a customer you are dealing with directly, when you hand your product over to a third-party driver, it’s out of your hands.
- The money you save on labor and infrastructure goes straight into their pockets. On the surface, it seems like a pretty good deal when you don’t have to hire extra staff and take on additional payroll just to manage your take-out and delivery. However, all that money you save cuts into your margin and goes straight back to the third-party. If you look at the numbers, is there really a benefit?
- Your brand is diluted. With so many third-party delivery companies working in your neighborhood, more and more restaurants are jumping on the bandwagon. While a little competition is good for business, how are you going to stand out? In the bigger scheme of things, you are just one fish in a crowded sea.
- Lackluster Integrations. Technology is great. However, you already have a POS. You might also have an online reservation management system, like Open Table (OT). That’s already two things to manage right there. While OT is whipping out some nifty POS integrations as we speak, third-party ordering apps give few cares about making it easier for you to reconcile your daily sales. The more channels you have to manage, the more headaches for you, and the more chances there are for costly mistakes. Where’s the value? Life is way too short already.
Taking Back Your Power: How to Reduce Costs on Third-Party Ordering
Third-party ordering services have their merits, for sure. But, if you’re an established business or if you’ve already done a lot of work to build a loyal customer base, there is a better way. With your own mobile ordering app, you can take back control of every process and reward your loyal customers for every purchase they make. Additionally, you’ll keep 100 percent of your revenue and have complete oversight of the quality of your product.
Beyond the revenue, it’s really about building relationships. People are always going to be hungry, and they’ll always want a variety of restaurants to satisfy their cravings, but what keeps them coming back is the experience. You don’t get the warm fuzzies from GrubHub or DoorDash, but a branded mobile app will give your customers the same convenience with an added personal touch.
The Solution: Your Own Custom Mobile App
TapMango creates custom mobile ordering apps that are designed to engage and reward, but it’s not just your customer who reaps the benefits. Let’s dive a little deeper and look at what a TapMango custom-branded mobile ordering app can do for your café, quick-service restaurant, or coffee shop:
Custom branding means that your user interface and experience is consistent with all of your other channels. This gives you complete control over how you come across to your customers, no matter what channel they choose.
Own Your Data
You retain full ownership of customer data, meaning you can apply those metrics to improve your demand forecasting, ordering, and scheduling.
Connect With Your Customers
With the ability to market and communicate directly to your clientele, you can reach out with timely information they will appreciate, such as specials, events, modified hours. Enable push notifications to send personalized offers and updates even when they are not using the app.
Own Your Loyalty Program
You control your loyalty program, points, and rewards, 100 percent. Just for fun, you can even gamify your points with incentives and contests. Your customers can track their progress and redeem their reward points directly through the app.
No Hardware to Purchase
Unlike some third-party services, there is no extra hardware to purchase. There are no transaction fees – in fact, there are no fees, period! You keep the money. You’ve earned it.
Your app is designed to make your life easier, not more difficult. It’s fully integrated with your POS, meaning your end-of-day is as simple as it can be. There’s no more reconciling multiple channels, reducing errors and aggravation. Your closing manager can go home at a decent time and might even save money on headache medication too.
Your TapMango app provides support for multiple locations in a single interface. Customers can choose their preferred location or try the one that’s closest to them.
Customers load funds into the app’s mobile wallet for convenience. Since they collect rewards every time they order, they will want to use it every chance they get.
What Should You Do About Your Third-Party Service?
Now that you know about the money you can save and all the other benefits of having your own custom-branded TapMango mobile app, the question remains: what should you do about your third-party service?
If you are doing well with your third-party, there’s no immediate need to jump ship. However, if you don’t seize the opportunity to take back control of your revenue and your data, you are missing out.
There will definitely be a transition phase, but as you segue into your new reality, be sure to sign up every customer to your own branded loyalty program. Once you are connected, you can communicate with them via email, SMS, and in-app notifications, reaching them in more meaningful ways while ensuring you retain complete control of your brand.