The truth behind third-party ordering apps

Third-party ordering apps have revolutionized the way consumers interact with shops – both for better and worse. While these platforms can offer access to a broader customer base, they also come with a hefty price tag that includes more than just money.

New customer acquisition

Third-party ordering apps like Uber Eats, DoorDash, and Grubhub can expose your shop to a pool of potential customers across new markets and demographics. This can come at a cost of up to 30% of the total order value. That’s a fair price to acquire a new customer, but it’s not a viable long-term solution.  

The key is to think of these apps as new customer acquisition tools. If a customer’s first order from you is on Uber Eats, every order after that should come directly from your website or a flat-fee, first-party ordering partner.  

Higher menu prices

You could increase your prices on the third-party apps to offset the up to 30% fees — turning a typical $22 in-shop order into a $30 order on the delivery app — but your average customer won’t know that the price is being driven up by the apps’ crazy fees. 

This experience can result in less trust for your shop because customers may think they’re getting taken advantage of. Or, customers might think that’s how expensive your restaurant is in general. In turn, they could avoid your shop, despite the fact that your actual menu prices are fair and reasonable. 

Profitability

Cost plays a crucial role in your decision to sign up for delivery apps. With commission fees often reaching up to 30%, you must assess whether the increased sales volume justifies the additional expense.

It's a critical question of efficiency and profitability. How many more sales are needed to offset the higher fees? Is it worth the extra labor, supplies, and time to achieve comparable profits? In many cases, the overhead associated with producing and delivering a larger volume of orders means working harder for less profit.  

In other words, wouldn’t you rather make $5,000 from 150 pizzas than $5,000 from 300 pizzas? 

The trade-off of control

When you leave order fulfillment and delivery to third-party platforms, you’re relinquishing control over the customer experience. As a shop owner, you pride yourself on providing customers with exceptional service and a quality product. However, delivery apps and their drivers may not live up to your standards.

Your data is being stolen

Third-party delivery apps are literally stealing your customer data. These apps don't care if your customer orders again from your shop — they only care that they order again from their app. 

This conflict of interest means your customers will get emails, push notifications, and texts promoting competing restaurants to your customers. And even if you wanted this customer data so that you could market to them yourself, they won’t give it to you.  

The best way to leverage third-party apps

Be smart about how you use third-party delivery apps. While they offer undeniable benefits, including increased visibility and convenience, there are costly trade-offs. 

The quick bite: Third-party apps can bring you new customers, but you can’t afford to pay an up to 30% cut for every order. Raising prices on delivery apps will hurt your relationship with customers and, over time, delivery apps will redirect your customers to competing restaurants.