Restaurant Delivery: What can restaurant operators do to drive profitability?

Is restaurant delivery here to stay? I'd say so. Customers love the convenience, but operators hate the commissions. For those of you in the hotel world, I bet this sounds familiar--gee, just like OTAs!!!!

I recently wrote a short article for Channel News Asia talking about delivery in Singapore. I hope you find it interesting.

But, on a practical note, what are some things, other than opening their own cloud kitchen, that restaurant operators can do to make paying the delivery commission less painful? The challenge is what can be done to make delivery profitable. I will focus on some things that you can do immediately:

  1. Manage your demand. Your kitchen can only handle so many orders. If you find that you’re getting up to that limit, stop taking delivery orders. Otherwise, you risk falling into the ‘Mother’s Day’ issue that occurred last year in Singapore.

  2. Encourage takeaway: Takeaway orders are more profitable because you don’t have as high of a commission cost. Encourage them by offering lower prices or other discounts. Even a discounted price will probably be more profitable than having to pay the delivery commission. If your delivery service providers offer a lower commission rate for takeaway orders (as in they’ll still list your restaurant on their app), strongly consider doing this.