What delivery apps really cost a restaurant

Delivery apps are easy to say yes to. There's no setup fee, orders start arriving in days and someone else finds the customers. The cost comes later, a little at a time, as a percentage of every order. This guide shows how to work out what that percentage adds up to for your restaurant, and what it costs beyond the fee itself.

The commission

Marketplace apps usually charge a percentage of each order's subtotal. The rate depends on the plan you pick and on whether the app's own couriers deliver the order: plans with more exposure and delivery included cost more. Rates in the range of 15% to 30% are common. Your contract and your monthly statement say exactly what you pay.

A worked example, using the numbers in the calculator below:

• 60 app orders a week is about 260 orders a month (60 × 52 ÷ 12).
• At an average of $35, that's $9,100 in app sales a month.
• At 25% commission, the app keeps $2,275 a month, or $27,300 a year.

Now compare that with what you actually keep on an order. After food, packaging, labour and rent, many restaurants keep a small share of each sale as profit. If yours is 10%, a $35 order earns you $3.50, and a 25% commission on the same order is $8.75. On that order, the app is making more than you are.

Find your real rate

The headline rate isn't the whole bill. To see what you really pay, take last month's statement from each app and work out:

• Gross sales: what customers paid for your food through the app.
• Net payout: what actually reached your bank account.
• Your effective rate: (gross sales − net payout) ÷ gross sales.

The effective rate usually comes out higher than the commission alone, because it also picks up card processing, promotions you agreed to fund, marketing or placement fees, and refunds for orders the app decided in the customer's favour.

What the fee doesn't show

• The customer belongs to the app. You get an order, not a relationship. You usually can't email your app customers, and the next time they're hungry the app is free to show them someone else.
• The brand is the app's. Customers remember where they ordered, and that's the app's name on the screen.
• Your menu is squeezed into their format. Half-and-half pizzas, topping limits and multi-pizza deals often have to be simplified, and some owners raise app prices to cover the fee, which makes the restaurant look expensive.

When an app is still worth it

Apps are good at one thing: putting you in front of people who don't know you yet. That can be worth paying for. The trouble starts when your regulars keep ordering through the app out of habit, and you pay a finder's fee every week for customers you already found.

A sensible mix is to keep the apps on for discovery and give regulars a better reason to order from you directly. Our guide on moving regulars to your own online ordering shows how.

Try your own numbers

Put your weekly app orders, average order and commission rate into the calculator below. It counts commission only, so treat the result as the floor, not the ceiling.