Commission-Free Delivery: How Restaurants Can Save and Thrive

In the restaurant industry, commissions from third-party delivery services typically claim around 30% of each order, significantly impacting profitability. However, a growing trend known as commission-free delivery offers restaurants a cost-effective alternative. But how exactly does this work, and what makes it different from traditional delivery services?

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Understanding commissions

A commission, at its simplest, is a fee paid for facilitating a sale. In food delivery, this occurs when third-party platforms—like marketplaces—take orders on behalf of restaurants, charging a percentage for this service. For example, if a restaurant sells a pizza for $10, platforms like DoorDash or Uber Eats might take around $3, which represents a 30% commission.

What is commission-free delivery?

Commission-free delivery refers to restaurants managing and processing their own orders—often via their own website or phone—thus eliminating the need for third-party sales channels and their associated commissions. This method distinguishes between two main activities:

• Sales vs. order-Taking: Third-party platforms offer value by attracting new customers through their marketplace. For new customer acquisition, paying commissions makes sense. However, for returning customers who directly approach the restaurant, there’s no need to pay commission. This becomes purely order-taking rather than sales.

Direct vs. indirect channels

Direct channels include orders placed through the restaurant's own website, app, or phone system, bypassing third-party marketplaces. Indirect channels involve marketplaces like DoorDash or Uber Eats, which list multiple restaurants and charge commissions for their exposure and order facilitation.

Why choose direct channels?

Direct channels allow restaurants to retain full control and profits from existing customer relationships. Customers who know and trust a restaurant can conveniently order through the restaurant's own platforms. Restaurants using tools like Shipday can streamline their delivery logistics, managing orders efficiently without paying commissions.

The marketplace concept

Marketplaces serve as digital shopping malls, aggregating multiple restaurants onto a single platform. They were initially essential for restaurants lacking a robust online presence. Today, as digital ordering matures, restaurants increasingly question their reliance on marketplaces for regular customers.

Implementing commission-free delivery

To successfully leverage commission-free delivery, restaurants should:

1. Establish a Strong Digital Presence: Offer an intuitive, easy-to-use ordering experience on your website.
2. Leverage Delivery Management Software: Use services like Shipday to handle logistics efficiently, connecting with drivers or third-party delivery providers without paying additional commissions.

Enhancing customer experience

Direct, commission-free delivery also empowers restaurants to personalize the customer experience, fostering deeper relationships and customer loyalty. Unlike generic third-party deliveries, direct delivery can provide enhanced service and attention, improving customer satisfaction and retention.

The economic benefit

Avoiding commissions significantly reduces costs. A $21 order via third-party apps can sometimes cost customers up to $45 due to commissions and fees. Direct delivery significantly lowers this cost, benefiting both restaurants and customers.

Real-world examples of commission-free delivery success

KFC Barbados enhances multi-location delivery operations KFC Barbados, managing 12 locations, previously struggled with a manual, phone-based delivery system. Adopting Shipday in 2020, they halved their delivery support costs through auto-dispatch and route optimization, saving $1,200 daily across six locations, equating to over $400,000 annually.

La Familia Katonah saves 100 hours monthly La Familia, an Italian-American staple in New York, significantly reduced operational hours by 60-100 per month through Shipday’s automated dispatching and AI-powered navigation, also earning 53 new five-star Google reviews in just 20 weeks.

Manjaros streamlines complex delivery processes Manjaros, an Afro-Caribbean restaurant chain in northern England, adopted Shipday to streamline its complex delivery operations across 18 locations. IT consultant Saman Karimi noted how easy integration and commission-free delivery lowered operational costs and enhanced scalability.

Steak Out boosts efficiency and customer satisfaction Bryan Tobin, owner of Steak Out in New Jersey, leveraged Shipday to overcome limitations from their previous POS system. Real-time tracking and improved oversight increased their on-time delivery rate from 90% to over 98% and boosted online orders from 20% to nearly 30% of their total business.

Conclusion

Commission-free delivery isn't just a concept—it’s a sustainable business strategy. Restaurants that adopt this approach using modern tools like Shipday can enhance profitability, customer satisfaction, and overall control over their delivery process.

To learn more about implementing commission-free delivery for your restaurant, visit Shipday’s website or connect with their team on social media.

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