• Admin
• December 9, 2024
• Online Ordering Trends

The Rise of Commission-Free Ordering: What Restaurants Need to Know

The restaurant industry has seen a significant shift in recent years, with online ordering becoming an essential part of the business model for many establishments. However, while third-party delivery services have made it easier for restaurants to offer delivery and takeout, they often come with high commission fees that can eat into profit margins. This has led to the rise of commission-free ordering platforms, providing restaurant owners with an alternative that helps maximize profits without the hefty fees.

Let’s dive into what commission-free ordering is and how it can benefit your restaurant.

1. What is Commission-Free Ordering?

Commission-free ordering refers to a system where restaurants do not have to pay a percentage of each sale to third-party platforms, like Uber Eats, DoorDash, or Grubhub, which typically charge high commissions on orders. Instead, restaurants pay a fixed subscription fee to use a platform that handles their online orders.

This setup is a game-changer for restaurant owners, as it eliminates the often steep commissions — which can range from 15% to 30% per order — and replaces them with a predictable monthly cost, allowing for better financial planning.

2. The Financial Benefits of Commission-Free Ordering

One of the most immediate advantages of switching to a commission-free ordering system is the potential to increase profits. By removing the commission fees that can sometimes take a significant chunk of your revenue, you can retain a higher percentage of each order.

• Higher Profit Margins: Without commission fees, restaurants can keep more of their sales. For instance, if you previously paid 20% in commissions to a third-party platform, those funds are now available to be reinvested into your restaurant’s operations or used to improve your menu offerings.
• Predictable Expenses: With a fixed subscription model, you know exactly what your monthly cost will be. This predictability makes it easier to budget for marketing, staffing, and other operational costs, giving you more control over your bottom line.

3. Control Over Your Customer Data

One of the most valuable assets for any business today is customer data. Third-party platforms typically collect and own the data associated with orders placed through their services, which means restaurants don’t have access to valuable customer insights.

When using a commission-free ordering system, however, restaurants can retain full ownership of customer data. This information can be used to personalize marketing efforts, create loyalty programs, and track customer preferences. By understanding your customers better, you can offer more relevant promotions and improve the overall customer experience.

4. Improved Customer Relationships

Another key benefit of commission-free ordering is the ability to build stronger relationships with your customers. Third-party platforms typically don’t allow restaurants to communicate directly with their customers, which can hinder personalized customer service and follow-up opportunities.

With commission-free ordering, restaurants have the ability to connect with their customers directly, whether through email, SMS, or push notifications. This provides a more personalized experience, allowing you to engage with your customers in ways that third-party platforms often don’t allow, such as offering special deals, loyalty rewards, or updates on new menu items.

5. Brand Control and Marketing Flexibility

Using third-party platforms can sometimes dilute your brand, as customers often associate their experience with the platform rather than your restaurant. With commission-free ordering, you have full control over your branding, which can enhance your restaurant’s identity and visibility.

• Customizable Ordering Experience: Commission-free platforms allow you to tailor the ordering interface to match your restaurant's look and feel, from the design of the menu to the customer checkout process. This ensures that your branding remains consistent, even in the digital space.
• Promotions and Marketing Flexibility: Many commission-free platforms offer marketing features, like coupon codes and promotions, that allow you to market directly to your customers. You can run special deals and events to encourage repeat business or drive traffic during slower periods.

6. Reduced Dependency on Third-Party Platforms

Relying on third-party platforms to drive orders can put your restaurant at the mercy of their pricing changes, policies, and potential service disruptions. With a commission-free ordering system, you reduce your dependency on these platforms, putting your business in a better position to navigate changes in the market or industry.

For example, if a third-party service raises its commission rate or implements unfavorable changes to its terms, it can significantly impact your profit margins. With a commission-free platform, you are insulated from these changes, allowing you to focus on running your restaurant without constantly worrying about external factors.

7. Faster Payment Processing

One downside of using third-party platforms is the delay in receiving payments. Many third-party delivery services have a slow payout process, sometimes taking days or even weeks to release the funds.

With commission-free ordering systems, restaurants can often receive payments more quickly and efficiently, improving cash flow and enabling quicker reinvestment into the business. Faster payments are crucial for maintaining the day-to-day operations of your restaurant, such as ordering ingredients, paying staff, and managing bills.

8. Seamless Integration with Existing Operations

Switching to a commission-free ordering system doesn’t have to be a complicated process. Many platforms are designed to integrate seamlessly with your existing restaurant management software, POS systems, and payment processors.

Whether you're using a traditional point-of-sale (POS) system or a cloud-based solution, commission-free platforms are often customizable to meet your specific needs, making it easy to manage orders, track inventory, and process payments all in one place. This integration improves efficiency and reduces the chance of human error.

Conclusion

The rise of commission-free ordering platforms is transforming the restaurant industry by offering an alternative to the expensive commission fees that often drain profits. By switching to a commission-free system, you gain control over customer data, increase profit margins, build stronger customer relationships, and reduce dependency on third-party platforms.

At FoodFlows, we offer a commission-free, easy-to-use online ordering platform designed to streamline restaurant operations and improve profitability. With a simple subscription model, real-time order management, and customizable features, FoodFlows is the perfect solution for restaurant owners looking to take control of their online ordering experience.

If you’re ready to reduce costs, enhance your customer relationships, and boost your profits, try FoodFlows today and see the difference a commission-free ordering system can make for your restaurant!