The pandemic has changed everybody’s habit of buying products and seeking services – it’s all online now. With the advancement of mobile technologies, everything is accessible from handheld devices today, and a restaurant food delivery service is no exception. In fact, the importance of online food delivery apps has grown manifold post-pandemic.
According to the research giant Statista, the global online food delivery sector market size was projected at $770 billion in 2022, of which $300 billion were generated in the meal delivery segment. By 2027, the online food delivery market is expected to bring in revenues of a whopping $1.4 trillion.
But here is a shock!
The figures you see here could have been doubled or tripled because the revenue made through restaurant delivery apps is actually not the profits made by restauranteurs or café owners! Unbeknownst to the owners of restaurants or food delivery businesses, most of the profit has been going to giant food delivery app platforms that have business models of illusive incremental margins.
Confused?
Here we clear everything for you, and you, as a restaurant owner, would get dazed that you have been missing a lot by being on popular food delivery apps.
The Restaurant Delivery Apps are the best, at least you think so!
An online restaurant delivery platform is a platform that brings food lovers or patrons and restaurants of all kinds (food chains, café, food joints, eateries, and the like) into one place. Customers can simply browse through their favorite restaurants or dishes and then order them online – it is as simple as that.
Now, when you want to take your restaurant online, the easiest way to do this is to get on to the popular restaurant food delivery apps such as GrabHub, Food Panda, Uber Eats, Swiggy, or Zomato. There are dozens of popular online restaurant delivery apps available in global market for online food business. These applications allow you to register your restaurant, cafe or cloud kitchen business online on their platforms and offer you an easy flow of online food orders to which you seem to be pretty much okay. But, there is a catch.
“The best is not always good for you!”
Every business you see on the market is there to make profits and the food delivery app business is no exception. Popular food delivery apps for restaurants adapt several types of business models, incremental margins being the most popular one. They would charge you some commissions for each online food order. You are happy as you are getting online customers, but if you carefully delve into incremental margin calculation, the results would be upsetting.
What is the Incremental Revenue through margin profit?
Most readymade popular restaurant delivery applications adopt incremental profit as their business model. It means that there is an agreement on all the online food delivery orders they get from the app. The restaurant that operates brick-and-mortar premises has several expenses such as rent, salaries, utilities, equipment, stationery, and other marketing materials. Hence, the prices of dishes of various cuisines are justified keeping all other expenses and overheads into account. Now, if the restaurant is able to cover all the expenses with the prices mentioned for on-premises (or dine-in), then there are wider margins to consider when it is all about online sales.
Online restaurant food ordering apps serve as a platform that connects your restaurant with food lovers who would order their favorite dishes online. Now, the restaurant delivery marketplace makes you believe and agree that all your online ordering sales shall have ‘incremental profit’ which means you would not have gotten them otherwise. If the chef at your restaurant is cooking and the rent and salaries are to be paid anyway, you must exclude these costs while considering the profitability through ‘incremental’ commission-based restaurant ordering sales.
How is the Commission Calculation actually harming your business?
To understand the incremental margin calculation, you need to read between the lines. When fixing the prices of dishes or food items, you need to mind several costs such as labor, rent, electricity, and the like. This burden is equally distributed to all the items whether or not they are consumed. Since it is difficult to calculate and separate each resource for dine-in services and online food ordering services for a restaurant, for calculation ease, you can divide all the profits among all the items on the menu.
Most of the popular restaurant food delivery apps work on a margin of 30% for each order they get you online. Now, if you consider this margin and divide all the profits into all the items, your actual business profit will start disappearing.
Not just local restaurants, cafés, and eateries, but even multinational food chain restaurants find it difficult to understand and digest incremental gross margin profits that renowned food delivery apps consider while taking their share from each sale. For instance, Domino labels this business model as ‘problematic’ and its CEO openly said that they don’t want to give up their 25% shares with each sale generated. Other large chain restaurant owners have also called it ‘margin killers.’
Plus, you will be surprised that the amount you fix for each food item on your menu could be changed without your notice. Even more surprising is that such an on-demand food delivery app platform for restaurants would charge your esteemed customers with delivery charges.
Ultimately, the total cost of a dish would be much higher for your patrons when they order the food online. For instance, if you sell a small-size pizza at 5$ including whatsoever taxes, the same dish would reflect the price of $6 on a popular restaurant delivery app. Plus, there shall be a delivery charge of $0.5 to 1. Hence, the total cost to your customer would be $6.5 to 7$ whereas the same customer, if you prefer a platform like foodiv like,, would pay $5.
What do you lose when you are on Popular Food Delivery Apps or platforms?
The first thing you lose is the profit margin. Later, you start losing your brand value because when customers come to know the total cost they pay for a dish by ordering food online, they would be stunned and think that you are cheating on them. Trust is what makes or breaks any business, and with such an incremental profit approach by renowned restaurant delivery apps, you may lose it.
Foodiv helps to Increase your Business Profit!
Foodiv is an online food ordering platform that allows you to register your restaurant business in a jiffy. While you get all the benefits you find on popular food delivery applications, the biggest benefit is margin-free profits for any number of sales you get. With nominal charges, you can take your brick-and-mortar restaurant online and enjoy all the benefits that an online business would enjoy.
Foodiv Benefits – your sales, your profit. No commission at all.
Foodiv believes in transparent business and the makers understand that all the efforts that restauranteurs make should be worth all the profits they make. In other words, Foodiv is a breakthrough for all online food delivery problems faced by restaurant owners.
Here are a few cogent reasons why should you consider Foodiv as your online food ordering partner –
Take your restaurant from ground to online in just a few minutes
Readymade software solution for online food delivery – no heavy development costs
Ideal restaurant food delivery app solutions for cafés, restaurants, hotels, and eateries
Set, edit, modify, or delete the digital menu
Add, edit, and modify any restaurant information with ease
Upload high-resolution photos for better presentation
No Commission, all profit is yours!
NO hidden costs
Online restaurant delivery software tools come with a heavy price tag especially when you build them from scratch. Foodiv offers you a readymade online food ordering system for your restaurant food delivery business. All you need is just embrace the goodness of the website and app, register your restaurant online, and start making profits that are all yours; Foodiv stays away from all malpractices of illusive incremental margins!
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