Online Ordering Platforms: Friend or Foe to Restaurant Profits?

13 min read

So, online ordering, right? It’s everywhere. As a restaurant owner, or even just someone thinking about diving into the food biz, you can’t ignore it. It feels like every other customer wants to tap a few buttons on their phone and have their Pad Thai magically appear. But here’s the thing that keeps nagging at me – and probably at a lot of restaurant owners – are these platforms *actually* helping our bottom line? Or are they slowly eating away at our profits, one delivery fee at a time? I’ve been wrestling with this, and frankly, it’s complicated. I decided to write this article to help share my insights and thoughts on this topic, and hopefully, it can be useful to you.

I remember when I first dipped my toes into online ordering. It was back when I was helping a friend revamp his small Italian place in Nashville. We were hesitant, worried about the commissions, the logistics, all of it. But the pressure was on, everyone else was doing it, and we felt like we were falling behind. The initial bump in orders was exciting, I won’t lie. Seeing those tickets print, knowing it was all happening through this new, digital channel… it felt like the future. But then the monthly statements started rolling in, and the reality of those fees started to sink in. It wasn’t *quite* as rosy as we’d initially thought.

This article is my attempt to untangle this whole mess. We’re going to dig into the real costs and benefits of using these platforms, look at some alternatives, and try to figure out if there’s a way to make this whole online ordering thing work *for* restaurants, not against them. We’ll look at the impact on everything from staffing to marketing, and even how it affects the overall customer experience. Are we sacrificing something essential in the pursuit of convenience? Is that convenience is eating awy from our profit margin? Let’s find out.

The Allure and the Pitfalls of Online Ordering

The Obvious Upsides: Reach and Convenience

Let’s start with the undeniable positives. Online ordering platforms, like Uber Eats, Grubhub, DoorDash (and a whole host of others), offer something incredibly valuable: expanded reach. Suddenly, your restaurant isn’t limited to the people who walk by or hear about you through word-of-mouth. You’re on a platform with potentially thousands, even tens of thousands, of hungry users in your area. That’s a massive marketing boost, especially for smaller, independent restaurants that don’t have the budget for big advertising campaigns.

And then there’s the convenience factor. People are busy. They’re tired. They don’t always feel like cooking or going out. Online ordering makes it ridiculously easy to get food from their favorite restaurants without having to leave their couch. This convenience translates into more orders, especially during peak times or when the weather’s bad. It’s a win-win, right? Well, not so fast…

It’s also worth noting that online ordering can streamline your operations in some ways. Orders come in digitally, often directly integrated with your point-of-sale (POS) system, reducing the chance of errors from taking orders over the phone. This can free up staff to focus on other tasks, potentially leading to increased efficiency. But this efficiency comes at a price, and it’s a price we need to examine closely.

The Commission Conundrum: A Deep Dive into Fees

Here’s where things get tricky. Those commission fees. They’re the elephant in the room, the constant buzzkill in the online ordering party. These platforms typically charge a percentage of each order, and that percentage can range anywhere from 15% to 30%, sometimes even higher. That’s a significant chunk of your revenue, especially when you consider the already tight margins in the restaurant industry.

Think about it: if you sell a $20 dish, and the platform takes a 25% commission, you’re only getting $15. Out of that $15, you still have to cover your food costs, labor, rent, utilities, and all the other overhead expenses. Suddenly, that $20 dish isn’t looking quite so profitable. And it’s not just the commission on the food itself. Some platforms also charge fees for processing payments, delivery services, and even marketing and promotions within the app.

These fees, which can vary greatly depending on the platform and the specific agreement, can create a complex financial puzzle for restaurants. It is crucial to factor these costs in when pricing menu items, managing inventory, and planning overall business strategy to ensure long-term profitability.

The Hidden Costs: Beyond the Commission

But the commissions are just the tip of the iceberg. There are other, less obvious costs associated with using online ordering platforms. For example, you might need to invest in additional packaging to ensure your food travels well and arrives in good condition. This adds to your expenses and can also have an environmental impact, something more and more consumers are concerned about.

Then there’s the issue of data ownership. When customers order through a third-party platform, you often don’t get access to their full contact information or ordering history. This makes it harder to build direct relationships with your customers, run targeted marketing campaigns, or offer personalized promotions. You’re essentially renting your customers from the platform, rather than owning that relationship yourself. This is a big deal, and something I’ve struggled with personally. It feels like you’re building someone else’s business, not your own.

Another hidden cost? Potential brand dilution. Your restaurant is listed alongside dozens, maybe hundreds, of others on these platforms. It can be hard to stand out, and customers might start associating your food with the platform itself, rather than with your unique brand and dining experience. This is especially problematic if you’re trying to cultivate a specific image or atmosphere.

The Marketing Maze: Visibility vs. Control

Online ordering platforms often tout their marketing benefits, and it’s true that they can provide significant exposure. But this visibility comes at a cost, both financially and in terms of control. You’re competing for attention within a crowded marketplace, and you’re often reliant on the platform’s algorithms to determine how prominently your restaurant is featured.

Many platforms offer paid promotional opportunities, like featured listings or sponsored ads. These can boost your visibility, but they also add to your expenses. And even if you do invest in these promotions, there’s no guarantee of a return on investment. You’re essentially bidding against other restaurants for the same customer eyeballs.

Furthermore, you have limited control over how your restaurant is presented on the platform. You might be able to upload photos and descriptions, but you’re still operating within the platform’s framework. This can be frustrating if you want to convey a specific brand message or highlight unique aspects of your restaurant.

The Staffing Strain: Balancing Online and In-House Orders

Integrating online orders into your existing workflow can also put a strain on your staff. During peak hours, your kitchen might be juggling in-house orders, takeout orders, and multiple delivery platform orders simultaneously. This can lead to increased stress, longer wait times, and a higher risk of errors. This is not always the case, but when it happens it can be a huge headache.

You might need to hire additional staff to handle the increased volume, or dedicate existing staff specifically to managing online orders. This adds to your labor costs, which, as we’ve already discussed, are already a significant expense. And it’s not just about the number of staff; it’s also about training. Your team needs to be proficient in using the platform’s technology, managing orders efficiently, and ensuring accuracy.

It’s a delicate balancing act. You want to capitalize on the increased demand from online ordering, but you also don’t want to compromise the experience of your in-house customers or burn out your staff. Finding that sweet spot can be a real challenge.

The Customer Experience Conundrum: Quality Control and Communication

When a customer orders through a third-party platform, you lose some control over the customer experience. You’re relying on the platform’s delivery drivers to get the food to the customer on time and in good condition. Delays, cold food, or mishandled orders can reflect poorly on your restaurant, even if it’s not directly your fault.

Communication can also be a challenge. If there’s an issue with an order, it can be difficult to communicate directly with the customer to resolve the problem. You’re often going through the platform’s customer service channels, which can add delays and frustration. This lack of direct communication can damage customer relationships and lead to negative reviews.

And let’s not forget the importance of ambiance and personal interaction. When customers dine in your restaurant, they’re experiencing the full package – the atmosphere, the service, the personal touches. Online ordering strips away much of that, reducing the experience to a purely transactional one. This can be fine for some customers, but it’s not ideal for building long-term loyalty or creating a memorable dining experience.

Exploring Alternatives: Building Your Own Online Ordering System

So, what’s the alternative? One option is to build your own online ordering system. This gives you complete control over the customer experience, the data, and the branding. You can integrate it directly with your website, offer customized promotions, and build direct relationships with your customers.

However, building your own system requires a significant upfront investment. You’ll need to hire developers, design the interface, and handle the ongoing maintenance and updates. It’s a big undertaking, and it’s not feasible for every restaurant. But for those with the resources and the technical know-how, it can be a worthwhile investment in the long run.

There are also companies that specialize in creating white-label online ordering solutions for restaurants. These solutions offer a middle ground between using a third-party platform and building everything from scratch. You get more control and branding options than with a platform, but you don’t have to handle all the technical complexities yourself. For instance, companies like Chef’s Deal (chefsdeal.com) offer comprehensive kitchen design and equipment solutions, which can be integrated with online ordering systems to streamline operations. They also provide professional installation services and expert consultation, ensuring that your kitchen is optimized for both online and in-house orders.

Hybrid Approaches: Finding the Right Balance

For many restaurants, the best approach might be a hybrid model. This involves using a combination of third-party platforms and your own direct ordering channels. You can leverage the reach and convenience of the platforms to attract new customers, while also offering a direct ordering option on your website or through a dedicated app.

This allows you to capture the best of both worlds. You can benefit from the marketing power of the platforms, while also building direct customer relationships and avoiding excessive commission fees on a portion of your orders. It’s about finding the right balance that works for your specific business and your target audience.

You can also incentivize customers to order directly from you by offering exclusive discounts, loyalty programs, or faster delivery times. This can help you build a loyal customer base and reduce your reliance on the third-party platforms over time. It is a win-win.

Negotiating with Platforms: Getting the Best Deal

If you do decide to use online ordering platforms, don’t be afraid to negotiate. The market is competitive, and platforms are often willing to offer better rates or terms to attract and retain restaurants. Research different platforms, compare their fees and services, and see if you can negotiate a better deal.

You can also explore platforms that specialize in specific types of cuisine or cater to a particular niche. These platforms might have lower commission fees or offer more targeted marketing opportunities. It’s worth doing your homework to find the platforms that are the best fit for your restaurant.

And remember, you’re not locked in. If you’re unhappy with a platform’s fees or services, you can always switch to another one or focus on building your own direct ordering channels. The key is to stay informed, be proactive, and constantly evaluate your options.

Optimizing Your Menu and Operations for Online Ordering

Finally, it’s crucial to optimize your menu and operations specifically for online ordering. This means choosing dishes that travel well, packaging them appropriately, and streamlining your kitchen workflow to handle both online and in-house orders efficiently.

Consider offering a limited menu for online orders, focusing on items that are easy to prepare and transport. This can help you reduce waste, control costs, and ensure consistent quality. You can also adjust your pricing to account for the commission fees and other expenses associated with online ordering.

Investing in the right equipment can also make a big difference. For example, having dedicated prep areas and holding cabinets for online orders can help you keep things organized and efficient. Chef’s Deal (chefsdeal.com), as a supplier, offers various solutions tailored to optimizing kitchen workflows for online ordering, including specialized equipment and free kitchen design services. Efficient kitchen design contributes significantly to smooth operations and, ultimately, to profitability.

Making Online Ordering Work for You

So, are online ordering platforms a friend or foe to restaurant profits? The answer, as I’ve discovered, is: it depends. They can be a powerful tool for expanding your reach and increasing your sales, but they also come with significant costs and challenges. The key is to be strategic, informed, and proactive. Understand the fees, weigh the pros and cons, and explore all your options. Don’t be afraid to experiment, negotiate, and adapt. The online ordering landscape is constantly evolving, and restaurants need to be nimble and responsive to stay ahead.

Ultimately, it’s about finding a way to make online ordering work *for* your restaurant, not against it. Whether that means building your own system, using a hybrid approach, or simply optimizing your operations to minimize the downsides, the goal is to find a sustainable model that maximizes your profits and enhances the customer experience. It’s a challenge, no doubt, but one that’s worth tackling head-on. Are we there yet? I’m still figuring it out, but I feel like I’m on the right track. And that’s progress, right?

FAQ

Q: What’s the biggest mistake restaurants make when using online ordering platforms?
A: I’d say the biggest mistake is not fully understanding the *true* cost. It’s not just the commission; it’s the packaging, the potential for increased staffing, the impact on your brand… all of it. You have to look at the whole picture.

Q: Is it really worth it to build your own online ordering system?
A: It depends on your resources and your long-term goals. If you have the capital and the technical expertise, it can be a great way to gain control and build direct customer relationships. But it’s a big investment, so you need to be sure it’s the right move for you.

Q: How can I encourage customers to order directly from my restaurant instead of using a platform?
A: Offer incentives! Discounts, loyalty programs, exclusive menu items… anything that makes ordering directly from you more appealing. Make it easy, make it rewarding, and make it personal.

Q: Should I use multiple online ordering platforms, or just stick with one?
A: There’s no one-size-fits-all answer. Using multiple platforms can increase your reach, but it also adds complexity. Start with one or two, see how it goes, and then consider expanding if it makes sense for your business. And always, *always* compare the fees and terms.

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@article{online-ordering-platforms-friend-or-foe-to-restaurant-profits,
    title   = {Online Ordering Platforms: Friend or Foe to Restaurant Profits?},
    author  = {Chef's icon},
    year    = {2025},
    journal = {Chef's Icon},
    url     = {https://chefsicon.com/online-ordering-platforms-restaurant-profits/}
}

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