Australians love to eat out. But they also love to order takeaway and eat on the couch. In fact, according to the Australian Bureau of Statistics latest research on household expenses, Australian households spend more on restaurant meals and takeaway than they do on electricity, gas and secondary education!
So, it seems a no brainer for your business to jump on board the takeaway and delivery boom. And it is doubly tempting to use a third-party online delivery app. There are some clear benefits: the ability to deliver your food direct to your customer without capital investment, the channel for discovering new customers who may not have typically known you exist and the opportunity to expand your market beyond just your number of seats.
But making a profit from third party online delivery apps is not easy.
Delivery platforms make money by charging commissions (this isn’t news to you, of course) and the rate varies between 20-25% of sales. But most restaurants’ net profit margins are no where near that, so how do you outweigh the cost?
How to protect your profit margins with Delivery Platforms
How can you make sure you are protecting your margins when you partner with a delivery platform like UberEats? There are a many ways to ensure you’re still making a profit when your customers order through online platforms, here are just a few:
Charge extra for delivery sales
This is not often talked about. Yes, delivery platforms charge the customer for delivery and charge you a commission on the sale. But there is nothing stopping you raising your prices specifically for that platform. This way you can factor the commissions into your bottom line without losing your margin.
Create a menu that is purely for delivery
Another solution is to offer and entirely different menu for delivery. One that is built for maximum efficiency from order to delivery. Here you can focus on menu items that are ‘durable’ during delivery (check out our gourmet burger range – our buns have longevity and are designed with delivery in mind). This way customers won’t be upset by the inflated price between eat-in and delivery menus as the menu items are completely different and can’t be compared.
Build your own database
When customers order through third party apps, you do not receive any of their contact details. They become a customer of the delivery platform (and you know they are going to continue to market to them!). Try to get your customers to sign up to your own database so you can turn them into repeat customers (and hopefully ones that order direct and pick up at your door!).
There is nothing stopping you from popping a flyer in each order that lets them know they can order direct and save money. Customers are more likely to be loyal when they are given discounts such as getting the tenth order free so make sure they know what is available to them if they order directly or sign up for your marketing.
The introduction of these huge third-party delivery platforms to the Australian hospitality industry has massively changed the way our restaurants operate. We are seeing many of our customers incorporate these techniques to ensure they not only survive but thrive in the new environment. Are you doing something similar? Or perhaps you have your own strategy? We’d love to hear about it on our facebook page.