The pandemic had a transformative impact on the country’s eating habits. Prior to the lockdowns, the average Briton was spending £38 on deliveries. Yet this increased to £53 for the year between spring 2020 and spring 2021. Companies like Deliveroo, UberEats and Just Eat saw orders jump by over 70% at the start of 2021.
Lockdown also forced many hospitality businesses to change the way they operated as many moved into offering contactless food deliveries. Although British people have their freedom back, the popularity of takeaways hasn’t decreased.
This is even more impressive when you realise third-party takeaway apps can cause takeaway prices to increase by as much as 44%. Research undertaken by Which? showed that the average takeaway was 23% more expensive when ordered on a third-party app as opposed to ordering directly.
These higher prices often force delivery businesses into hard decisions. If you don’t increase the prices of your products, then you have to pay a significant chunk to middlemen.
If your business is considering delivering food or you are currently on a third-party app, it is important that you explore all the options that are available to you. This article will explore which platform offers the most advantages.
Table of contents
- What are the benefits of using a third-party online food ordering system?
- What are the drawbacks to using a third-party online food ordering system?
- What are the benefits of creating your own online food ordering system?
- What are the drawbacks to creating your own online food ordering system?
- Why not try the Pomelo online ordering system
What are the benefits of using a third-party online food ordering system?
There are a number of reasons why third-party takeaway apps have exploded in popularity.
They are well-known
Studies show that more than 24 million people regularly use third-party apps to order takeaways. The biggest advantage to third-party takeaway apps is that they offer unparalleled reach. For new and emerging businesses, this is an invaluable tool.
Many customers begin their food delivery experience with a third-party app. Each brand has its own loyal customer base, and businesses get access to them when they join a particular platform. This normally increases sales and revenue.
They have their own infrastructure
If you don’t have the time or energy to organise your own delivery service and drivers, you will find a third-party app the ideal solution. Some branded apps like Deliveroo offer a delivery service that will allow you to offer food deliveries instantly.
Insurance, order tracking and administration costs will all be taken care of by the third party. You and your staff have the time you need to focus on your most important task – preparing and cooking food.
What are the drawbacks to using a third-party online food ordering system?
However, although they can increase sales, third-party providers have some significant disadvantages.
Their fees can eat into your margins
The biggest downside to third party delivery apps is the fees, which many restauranters have described as too high. These fees can reach as much as 30% which is a huge burden when the margins for many hospitality businesses are around 0 to 10%.
Of course, for many restaurants, it is impossible, which is why order values are inflated so much to accommodate these fees. Either your customers have to pay higher prices or you lose out from the additional costs for each order.
You have lots of competition
The goal of your restaurant is to make as many sales as possible. The goal of your third-party app is to have as many restaurants as possible signed up to the platform. So you will always be competing with a number of restaurants selling very similar products to you.
If you’re at the bottom of listings you will be at a significant disadvantage. There are a number of factors that will affect your position, and some platforms may ask you to pay higher rates to appear higher. If you are new and don’t have many good reviews, this will also put you at a disadvantage when compared with your competitors.
You don’t control delivery
Outsourcing services like delivery can be a blessing but also a curse. If you give up control of your delivery you are at the mercy of your delivery team. Figures show that when something goes wrong, 82% of customers will blame the restaurant.
Your driver may get lost, drive to the wrong address or drop off the wrong delivery, and it will be your fault. Restaurants have received complaints even when they don’t offer delivery services because third-party apps have added them to their platform without their knowledge.
They control customer data
The best way to increase sales is by learning more about your customers. Once you know when they like to order, what their favourite products are and how much they will pay for products you can optimise your menu and focus your marketing efforts better.
Using a third-party platform means that they have access to all your customer’s data. With it, they can attract repeat business through promotions, loyalty programmes and direct communication. With this data, the third-party app can ensure customers are far less likely to move away from it.
Is a third-party online ordering system the right choice for your business?
Although third party ordering apps can provide restaurants with a boost in sales, the hefty fees may make them unfeasible for small businesses. However if you have high margins and the ability to fulfill a high number of orders around the clock, a third-party app could help your business grow.
What are the benefits of creating your own online food ordering system?
If you’re unwilling to join a third party, you can always create your own online takeaway ordering system.
Fees are low
Create your own online ordering system and you only have to pay for the app itself and any card processing fees. The upfront cost of these can range anywhere between 0 to 600 depending on how complicated you need your system to be. Our online shop system is completely free to set up.
You will also need to factor in card processing fees which can cost anything from 1.49% to 3%. Taken together, the costs you pay work out a lot cheaper when compared to the fees you will have to pay when you join a third-party app.
Better cash flow
Working with a third party means that you receive your money from orders in line with their processes. This could be every week or every month. When you receive an order for a product on your own delivery platform, you’ll receive the money in a day at the very latest.
For restaurants and food delivery businesses that work with very close margins, having access to cash is paramount. Using your own platform ensures that you are always in full control of your cash.
Third-party delivery apps often use temporary or gig workers who are less invested in your customer’s experience. Taking control of every facet of the operation means that you can prevent problems from occurring and maximise customer happiness.
Maintain great service
The lack of any middleman means that you can deal directly with your customer. If a driver misses a time slot or you can’t fulfill an order, you can easily contact your customer when you need to. You have the power to maintain an impeccable service at all times.
Access better data
Staying in control of all channels means that you have full control of customer data. With this, you can enhance your upselling, perfect your customer loyalty programmes and elevate your marketing. You have all the information you need to make better decisions for your business.
Changing prices on a third party platform requires approval and this takes time. In comparison, if you want to run a promotion or remove a food item, you can easily do so when using your own online system.
Is an in-house online ordering system the right choice for your business?
Although it will cost some initial outlay to create a delivery system, having control of all systems will ensure that you can maintain the level of service customers expect. This, combined with the lower fees means that it often makes sense to create your own online ordering system.
If McDonald’s or KFC get an order wrong, a few bad reviews won’t do much to decrease the popularity of the restaurant. If a small, local restaurant starts getting bad reviews this could have a serious effect on business. Should you be in the latter category, having your own system will ensure you have the opportunity to succeed.
What are the drawbacks to creating your own online food ordering system?
There are a few disadvantages you need to consider when creating your own online ordering solution.
Not working with a delivery partner means that you will be on your own. If you are a new business, you will need to develop your customer base. You will need to create your own marketing plan, and it will take time to build your brand.
Should you be an established food business with a loyal customer base, this will be much less of a problem. In either case, being in control of everything gives you a much better opportunity to provide a first-class customer experience, and keep them returning.
You need your own delivery system
Naturally, having your own platform means that you will need delivery systems and workers in place to fulfill all of your orders. Maintaining all of these processes will increase the overheads of your food business.
However with complete control of the ordering experience, you can design it exactly how you want it. Special requests can be accommodated and issues can be resolved as soon as they happen.
Why not combine a third party platform with your own?
If you would like to leverage the customers from third-party apps, you can always combine both methods of delivery. Provide a stellar food experience and you may be able to persuade your customers to move to your platform next time they want to order food from you.
You can always tempt these customers with promotions and lower prices. Once you have built a significant customer base you can shift your business away from third-party platforms to your own ordering platform.
Why not try the Pomelo online ordering system
Are you looking for a cost-effective online store that is easy to set up, simple to manage and offers great functionality? The Pomelo Pay shop is completely free to build, which means you can test it out at no cost.
If you are a new, local or small business our platform is the perfect solution. You can create a functional, clean and modern shop that will allow you to develop your customer base and expand your business.
There are no monthly charges or add-on fees if you wish to build a shop with Pomelo Pay. You can also add multiple locations at no extra cost. The only thing you need to pay is a 1.49% fee for every transaction that is processed.
Simple set up
Our shop system is designed for businesses who wish to get started quickly. We offer one clean and fresh template that offers an attractive framework for all of your products. There’s no need to even pay for your own website, everything is self-contained within our platform.
We have achieved Payment Card Industry (PCI) Compliance Level 1, the most stringent PCI level for platforms processing payments. All debit and credit card payments processed by us are safe and secure and we have a range of the most popular payment options on our ePOS system.
We have a number of customisation tools so you can create a shop that reflects your brand and business. Logos, checkout fees and order messages can all be modified so you can create the user experience you want.
Sharing and promoting your shop through SMS and social media is simple. You can send customers a link to your store or you can show potential customers your QR code. All they need to do is click the link or scan the QR code and they will be sent to your menu page.
Our shop looks great on both desktop and mobile apps. Whether your customer is using an iOS tablet or Android phone, your storefront will look amazing. You’ll also get real-time notifications whenever an order comes through, to make managing your shop, simple and easy.
So if you would like to find out how our platform can help your restaurant, takeaway or coffee shop, click the button below or speak to us directly.
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