If you’re a restaurant owner, you’ve likely encountered third-party delivery apps like DoorDash. While they can expand your reach, the fees, sometimes as high as 30% per order, can significantly impact your profits. A recent survey revealed that 49% of customers believe these fees are excessive, especially since a portion of the cost is often passed on to them.
Understanding DoorDash’s pricing structure is crucial for making informed decisions that can help you minimize fees and reinvest those savings into growing your restaurant sales. This guide will break down DoorDash’s charges for restaurants, explore alternative platforms, and provide actionable tips to lower delivery fees and boost your bottom line.
DoorDash Fees: A Detailed Breakdown
DoorDash offers restaurants three distinct pricing plans, each with varying commission rates and benefits. Understanding these plans is vital for optimizing your restaurant’s profitability in the food delivery landscape.
DoorDash offers different pricing plans: Basic, Plus, and Premier, each with different commission rates and features.
- Basic: This is DoorDash’s most budget-friendly option. It includes a 7-day free trial, followed by a 15% commission on each delivery order.
- Plus: The Plus plan offers a 30-day free trial and charges a 25% commission on delivery orders. A key benefit is inclusion in DashPass, granting access to customers who enjoy waived delivery fees and reduced service charges. This plan also offers a wider delivery range compared to the Basic plan.
- Premier: As the highest-tier plan, Premier charges a 30% commission per delivery order, with a 30-day free trial period. It encompasses all the features of the Plus plan and includes a “Growth Guarantee.” This guarantee refunds your commission fees for the month if you accept at least 20 orders.
DoorDash vs. Competitors: A Cost Comparison
While DoorDash can be an effective tool for attracting new customers, it’s essential to consider the long-term costs and explore alternatives. Once you’ve acquired new customers, encouraging them to order directly through your website can significantly improve your profit margins.
Here’s a comparison of delivery fees across various platforms:
| Restaurant Fees | Cost per $100 Delivery |
|---|---|
| DoorDash | Up to $36 |
| GrubHub | Up to $35 |
| Postmates | Up to $35 |
| Uber Eats | Up to $36 |
| Owner.com | $0* |
*Does not include the flat rate billed monthly.
Grubhub
Grubhub’s delivery fees cap at 10%, with marketing fees ranging from 15% to 25%, depending on the chosen plan. While commission fees shouldn’t be the sole deterrent, it’s crucial to assess the platform’s popularity with customers. Grubhub’s market share has declined from a peak of 70% to under 20% as of 2020, making it less popular than its competitors. Furthermore, Grubhub’s availability is concentrated in major cities like New York, Boston, and Chicago, necessitating a location check before committing.
Postmates
Operating on a similar model to DoorDash and Uber Eats, Postmates charges commission fees ranging from 15% to 30%. A key differentiator is its extensive network of over 600,000 merchants, ensuring broad availability. However, Postmates imposes a direct deposit fee when cashing out earnings, adding to the overall cost.
Uber Eats
Uber Eats is a strong option for restaurants in their early stages, with commission fees ranging from 15% to 30%, aligning with other major third-party delivery apps. Uber Eats boasts a substantial international user base of 88 million and serves 10,000 cities as of 2022, making it more widely accessible than Grubhub.
Owner.com
For restaurants seeking commission-free delivery and enhanced sales opportunities, Owner.com provides an appealing alternative to DoorDash. This platform focuses on driving direct sales and simplifying upselling.
Owner.com enables restaurants to create branded online menus, facilitating direct orders and reducing reliance on third-party delivery apps.
Owner.com helps increase sales and orders by:
- Charging a flat monthly fee. Owner.com allows restaurants to utilize third-party drivers without incurring per-order commissions.
- Boosting customer satisfaction. By offering convenient direct ordering via a mobile app and reasonable delivery fees, restaurants can enhance customer loyalty.
Phillip Hang, owner of Sushi Me Rollin’, partnered with Owner.com to drive direct online orders, resulting in a $77,000 increase in direct online sales within ten months.
Strategies to Minimize Delivery Fees
Minimizing delivery costs is crucial for maintaining profitability. While third-party apps offer convenience and expanded reach, exploring alternative strategies can significantly reduce expenses for both your restaurant and your customers.
Several methods can help restaurants reduce delivery costs, such as building their own delivery system and promoting direct orders with flyers and loyalty programs.
- Develop in-house delivery capabilities: Establishing your own online ordering system allows customers to order directly from your restaurant, bypassing third-party fees. A website builder like Owner.com provides online delivery functionality, integrated SEO features, and strategic upselling tools.
- Promote direct orders with flyers: Including flyers in delivery bags encourages repeat customers to order directly from your website in the future. Adding promotional codes can further incentivize direct orders.
- Implement a loyalty program: Rewarding customers for ordering directly through your website can foster loyalty and reduce reliance on third-party apps.
- Encourage pick-up orders: Offering discounts or special deals for customers who pick up their orders can save on delivery fees.
- Adjust menu prices: Setting higher menu prices on third-party apps compared to your website can incentivize customers to order directly.
Conclusion: Optimizing Delivery for Profitability
Partnering with third-party apps like DoorDash can be a valuable marketing strategy for attracting new customers. However, prioritizing direct online ordering through a platform like Owner.com enables restaurants to reduce commission costs, increase sales, and enhance customer loyalty. By implementing these strategies, you can optimize your delivery operations for long-term profitability.
