In today’s video, we’re diving into a topic that affects many restaurant owners: third-party delivery apps. We all know and love services like Uber Eats, DoorDash, and #Grubhub, but what’s the real cost behind their convenience?
Join me as we explore the love-hate relationship #restaurants have with these apps. As a user myself, I understand how easy it is to order your favorite meal with just a few clicks. They bring in a whole new clientele and act as a fantastic discovery tool for restaurants. However, there’s a catch.
For restaurants, using these apps can be quite expensive. They charge #commissions ranging from 20% to 25% of the entire sale, which can be a significant blow to already slim profit margins. But wait, there’s more. Some localities have imposed caps on the fees these apps can charge, leading to creative workarounds.
For example, in New York City, there’s a cap on fees, but the apps have found a way to charge additional fees for marketing and advertising. Essentially, they offer restaurants prominent listings in exchange for extra payments on top of the commission. It’s a tough spot for restaurant owners because if they don’t pay, they risk getting lost among countless other options. Yet, paying up doesn’t always guarantee profitability.
In this video, I caution restaurant owners to pay close attention to the percentages and additional fees these apps impose. I’ll share a cautionary tale about one of my clients who initially saw increased sales and busyness with the apps but ended up losing money when all the costs were factored in.
To make the most of these apps, I provide some tips, such as being strategic with advertising investments and avoiding discounts that don’t contribute to higher average ticket prices. I also share my rule of thumb: aim to keep around 25% of the sale going to the food apps to ensure a reasonable profit margin.
It’s crucial for restaurant owners to step back and assess the real profitability of using these apps. They may bring in volume, but if the costs outweigh the benefits, it’s time to reevaluate your strategy.
Watch this video to gain valuable insights and ensure your restaurant business thrives in the era of third-party delivery apps. Don’t forget to like, comment, and subscribe for more business tips and accounting advice. Remember, running a profitable business is key!
