RESTAURANT FOOD DELIVERY SERVICES- BLESSING OR THREAT (Restaurant Association- Need of the hour)

This blog is specifically not for the super rich - heavily sponsored Restaurant owners with an aim to kill market for other. This is for the ones’ who are investing their hard earned money to bring out innovative concepts of Restaurants/ Dark Kitchens to sustain in this big markets.

Now, as a new restaurant, how do we place our foot inside this heavy loaded market with almost over 300 restaurants ready to serve customers in any locality? (Talking of Bangalore for now). We tend to search for marketing platform. We create facebook pages and wish to earn exposure through bloggers, facebook/ google ads, etc. Though sustainable, this is a very slow process, which may not provide return of investment as we desire.

So we move to the ever so lucrative option of FOOD DELIVERY SERVICES. As you approach the Account Managers of services like ZOMATO, SWIGGY, FOOD PANDA, UBEREATS, etc., they will leave no stone unturned to make us feel at home. We will be in the “NEW” section of the listings and they will sell advertisements to ensure that we get good number of orders as per our expectations.

But is it worth the investment?

For example, consider a commodity worth a sale value of Rs. 100.

Let us split this into few components:

1.     Food Cost + Wastage (If you are maintaining decent quality) ~ 20 % = Rs. 20

2.     Operations Cost  (Labor + Rent + Maintenance)~ 20 % = Rs. 20

3.     Packaging Cost ~ 10 % = Rs. 10

4.     Hidden Cost ~ 10% = Rs. 10

This sums up to Rs. 60 with Rs. 40 left in your pocket.

Ohh! Did I forget ever so important Platform Commission for these Delivery services? On an average, the platform commission comes to 25 % if taken on the lower end.

Henceforth, we are left with Rs. 15 per order in our pocket as profit.

So, does this end here? Not at all.

Now, some heavy payers would buy the slots at the top end of the Delivery apps and slide our listing to the corners. Even we will be kept offline during peak hours and would be denied exposure as required.

What can be do now with just Rs. 15 in our pocket?

We run good offers for our customers. We buy unwanted advertisements for those lucrative slots to somehow be on that top list. Neither does this marketing method lasts nor the money in our pocket.

Just when we were about to loose our interest to sustain in this Industry, Delivery services came with something new and innovative for us ( Hyper local Marketing, Pops, and many more). They assure us of unlimited exposure for few days on a condition that we sell our best items at bargain prices.  And we get fooled again. We buy the idea earning huge revenue with pocket investments. Selling at that low price, it incurs huge loss. We forget to understand that with over 300 restaurants in our locality, they will keep you engaged with 5 days of exposure and 295 days of dark shit.

This will also bring in a habit of our customers to consume cheaper products.

With so much more to elaborate and discuss, I end my blabbering here. I think I made a point.
With all due respect to these funded Food Delivery Services, I personally feel that there should be some restriction over their commission policies, marketing methods, etc., so that this tasteful Industry can become sustainable not only for the TAJ owner but also for a street vendor.