AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |
Back to Blog
Who owns deliveroo11/19/2023 It will be tougher to compete on price but at least you will be running a sustainable business that way. If you did the maths and you found that you didn’t make any money, it might be worth putting the cost of your online food up so that each meal you make is profitable. It’s true that they’re asking a lot of money from you, and it might feel good to tell them to go to hell. When restaurants find a way to rationalise selling unprofitable meals, it reminds us of an old joke you get in technology businesses: “I’m losing money per unit but I’ll make up for it with scale” Should I… tell them all to go to hell? The reason they are successful as companies in an industry where margins are so small is that they have created a marketplace where customers return to their website to find something to eat. It’s true that it will introduce some new customers to your restaurant, but these companies all make money on the basis that they own the relationships with that customer. We would recommend not rationalising a decision to cook unprofitable food based on the idea that Deliveroo, Uber Eats, or Just Eat is some kind of marketing channel. Look at the profits you make after Deliveroo or Uber Eats has taken their cut, and then decide whether the remaining profit is worth it. Before Deliveroo, we were selling a £10 meal at a much healthier £4 profit.ĭo this sum for your business. In the above example, that would leave us with £1 profit, which isn’t a lot. If you’re setting up a business from scratch which will be delivery-only, you’ll need to build a business plan from scratch and think a little more about this. You don’t have to deduct the cost of things like cost of a kitchen, license, and other start-up costs – those aren’t included in a marginal cost, because you would have had to buy those things anyway at the outset of your restaurant. For the sake of the example, let's they cost £4 and £2 respectively – leaving us with £1 profit. That’s the cost of your ingredients, and also the cost of the labour time it took to create the meal at the salary of the chef. Then, deduct the costs associated with the meal. Next, deduct 30% from that £10 – that’s going to Deliveroo – which leaves us with £7. Think about the price of a plate of food at your restaurant. (That’s the cost you incur as a business by making one extra meal.) To understand this, you need to think about the marginal costs of your food. Is it profitable for me to sell food when they’re taking 30% away? Now, you probably won’t lose money – but before doing anything, it’s worth checking the unit economics to see whether selling via these platforms will still be profitable for you. In fact, it’s such a lot, that some restaurants even lose money on meals they sell through these websites. Rates for you extra costs they charge your customersĭeliveroo around 30% admin £2.50 per order Just Eatđ4% (+VAT) and admin charge £699 up-front cost £0-4 Uber Eats capped at 30% admin £3.50 per order StoreKit or direct menuĒ.9% + 20p for click & collect delivery fees up to 10% none customisable by you The first thing to look at when considering what platforms to use is their costs to merchants: This article should set out which of them are the best for restaurants to be on, and when you should say no to a delivery app. (You can, technically, but if you do, it’s much better that you actively decide to ignore them rather than let them pass you by.) They might include: which apps are the most expensive to you which unlock the biggest potential new market each new app which app involves the most hassle and whether the kind of person who likes your restaurant is the kind of person who uses each app.īut the scale of Uber Eats, Deliveroo, and Just Eat is tremendous – and you can’t ignore them. If you're a restaurant, and you're looking to choose between them, there's a few ways to think about it. If you’re a restaurant, and you want a piece of that sweet chang, you have a decision to make – should you be on Deliveroo, Just Eat, or Uber Eats? UK restaurant delivery is worth £8.1 billion this year, which is a 13.4% growth since 2017. Update: In response to Covid-19 we have launched an online ordering system for takeaway – get started straight away taking control of your delivery operation.
0 Comments
Read More
Leave a Reply. |