How Your Pizzeria Can Fight Back Against Unfair Online Ordering Fees
Thanks to its universal appeal and easily portable nature, pizza has been a beloved staple of restaurant takeout for decades. It’s not surprising that in the age of online ordering, pizzerias are uniquely poised to profit. Online ordering grows order volume and size, increases revenue, boosts efficiency, and fosters customer loyalty.
If your pizzeria is one of the over 58% that already has online ordering, you’re likely already seeing these sorts of benefits. However, you’re also probably all too familiar with the hefty online ordering fees (up to 40% of each order!) that third-party marketplaces impose.
Get the full story about how third-party delivery apps are deceiving independent restaurants, stealing their customers, and eroding their profits by reading our new ebook: 4 Myths About Third-Party Restaurant Delivery—Busted.
Many pizzeria owners and operators are already fed up with these third-party online ordering fees. Paul Geffner, founder of a multi-location pizzeria in the San Francisco area, explains:
“Companies like Uber Eats and DoorDash take 23% to 28% of your gross receipts when they deliver your food. Basically, what they’re doing is advertising heavily to steal our business, and selling it back to us at a reduced rate.”
Unfortunately, Geffner recently had to close two out of his five locations due in part to the financial stress created by third-party marketplace apps.
Online ordering shouldn’t lead to the failure of beloved, independent pizzerias. Read on to see how restaurateurs like you can fight back against unfair online ordering fees and practices.
The Facts About Third-Party Online Ordering Fees
Third-party marketplaces often have overly complicated pricing structures that disguise just how much they’re taking from you.
Grubhub, for example, might charge your pizzeria a base of 20% per order just to appear on their site and accept online orders.
If your pizzeria is in a competitive area and you’re eager for marketing help, though, you’ll want to opt for a sponsored listing, which would place your restaurant near the top of search results. That, though, might cost 30% of each order instead.
Delivery is another 10% of your order. Even if you have your own delivery person and charge your customers a delivery fee, as many pizzerias do, Grubhub will take 10% of that too.
What if a customer orders takeout the old-fashioned way, over the phone? If they call you using the phone number listed on Grubhub, you’ll be charged for that too.
All in all, platforms like Grubhub cost you up to 40% of what you take in for each order.
This picture might look grim, but you should know that there are other options.
Look beyond the middlemen and get your own online ordering system.
Instead of giving up a huge slice of your profits in online ordering fees, consider getting your pizzeria its own online ordering system. This way, you can reap all the benefits of online ordering without paying commissions on every check.
ChowNow, for example, builds pizzerias their own commission-free online ordering systems. That way, you can take unlimited orders through your website and custom mobile apps for a low, flat rate. We offer ordering through Google and Yelp at the most restaurant-friendly prices in the industry, and give you the data and guidance necessary to grow your online ordering business.
Delivery is not always included in the ChowNow offering, but the separation gives you the autonomy to hire or replace, when necessary, drivers in-house or through courier services to maintain the integrity of your food in transit. Plus, we partner with local courier fleets all over the country to help you find the delivery options that are most sustainable for your pizzeria.
Do some research and find the option that’s right for you. While free online ordering systems or POS add-ons might be tempting, you should opt for a higher quality solution from a company that’s dedicated to growing your digital takeout business.
See the results for yourself.
Read our case study to understand how other pizzerias are using ChowNow to fight back against third-party online ordering fees. You’ll learn how The Good Pizza, a three-location concept in Los Angeles, used their ChowNow online ordering system, branded mobile apps, and automated email marketing to take their customers back from marketplaces like Grubhub and Uber Eats.
As a result, The Good Pizza has saved over $100,000, served over 14,000 orders through ChowNow, and grown sales by 138%.
- Sneak Peek: ChowNow’s Free Loyalty Program for Restaurants - March 25, 2020
- What Restaurateurs Need to Know Right Now About the COVID-19 Pandemic - March 19, 2020
- Why Prices on Grubhub Just Skyrocketed - February 11, 2020