My name is Wilson, and today we're gonna be talking about how do you become a restaurant
partner for delivery apps like UberEats, Postmates, Doordash and the bunch, and the common pitfalls
that you would like to avoid so you can profit a lot more in your business.
So before you even consider partnering up and becoming a restaurant partner for these
delivery apps, you need to understand why you'd like to do that, and the benefits that
it brings to your restaurant, and you need to be super clear in this.
Now, the first reason why you'd want to become a partner to these restaurant, is because
it brings you a lot more eyeballs and exposure to your band.
These brands and these delivery apps have raised millions of dollars, and they spend
millions in marketing budget just to get a bunch of people using their platform.
So for them, they are much more incentivized to get people to spend and to get people to
use their apps.
So in turn, if your restaurant is on their app, you would get exposed to a lot more different
people who may not have been exposed to your specific restaurant or brand to begin with.
So leveraging off their database is very, very important and one of the main key features
of why you'd want to partner up with these delivery apps.
The second reason why you'd want to partner up with these delivery apps, is because you
do not want to hire your own driver.
Dealing with HR, human resources, is already such a big problem.
Dealing with your in-house staffing is already such a big problem.
Why would you want to deal with having your own delivery team as well, when, at the end
of the day, you can have someone else take care of that for you?
I know there's going to be a fee involved using these delivery apps, but you don't need
to worry about their benefits, you don't need to worry about their wellbeing, the culture,
none of that.
You just need to make sure you give them their fee and they'll take care of all the delivery.
So that saves you a lot of time, trouble of dealing with your own driver.
Now, the third reason why you'd want to be able to use and partner up with these apps,
is because during the slow times, you're already paying for rent, you're already paying for
your cook.
Why wouldn't you want to utilize these apps and fulfill these orders although you might
not be profiting as much, although you may not have enough margins, or as much margins
as your dining customers.
This is still a very good way to offset your sunk cost, which is your rent and your labor
and everything that you already paid for.
So these are the reasons why you'd want to consider becoming a partner to these delivery
apps.
So what do these delivery apps charge?
They charge a percentage of your order, so anywhere from 15% to 35%, depending on the
structure and the relationship that you have with these apps.
So for example, with UberEats they charge 30%.
A lot of times you can actually negotiate down a few percentage points depending on
the location that you're at.
For other delivery apps, they go down as low as 15%, because those services, they just
drive you the customers, they not necessarily deliver for you.
So anywhere from 25% and to 35% is a very common percentage that I see a lot of restaurants
being charged this amount.
So what does that mean?
That means that if a delivery apps brings in around $10,000 in revenue for you, they're
going to pocket around 2,000 to $2,500, so that's their fee.
Now, in my previous video, I did talk about the margins that restaurant owners typically have.
That floats around 5 to 10%.
If you're good at managing your cost and everything, it goes up to 15 to 20%, but that's really
rare, and you've got to be like a super operator and super good with your numbers.
So what does that mean?
That means that you should not view these delivery app services as a strategy to increase
your profits.
As you can see in my video, previously I talk about the margins that restaurant owners and
cafes have.
Their margins are actually quite slim, ranging from 5% to 10 to 15% is a really core base
of how much people are actually profiting.
So what that means, is you can not utilize this strategy of partnering up with delivery
apps as a way to profit more.
That's not the intention and that's not the strategy.
The strategy is for you to partner with these delivery apps so it brings you new customers.
It gets you the exposure.
You calculate this as part of your marketing cost.
And in turn, when you have these eyeballs and these customers, it's your job and your
duty to convert them into regulars that will consume at your café and your restaurant.
So now that we know why you'd want to partner up with these delivery apps and what are the
percentages that they charge, I'm going to be talking about the five common pitfalls
that you should definitely avoid when partnering up with these delivery apps.
The number one pitfalls that you should definitely be aware of when dealing with these delivery
apps, is logistics.
So many businesses that I work with, their staff completely hates working with these
services, because it just seems like it's adding a wrench in their whole system, in
their engine.
They're already busy as hell, and all of a sudden they need to take care of this crazy
online order, and they don't want to be able to prioritize them.
But then yet, the driver's already here to pick up the order.
Oh my God, this is like a crazy nightmare for these staff.
And so it is very important for you to have proper logistics and proper training to implement
this system into your system.
Implement this strategy, so then that way it makes your staff more likely and want to
serve another type of customers and have all these online orders.
So make sure that you guys have the proper logistics and the proper training.
It is not as easy as signing someone up and it's good to go.
Have the proper systems.
The second common pitfall that I see so many business owners fall into is neglecting the
high percentages that these delivery apps charge.
Because they're not clear in the strategies of why they bring them on, and because there's
no up front fee, they seem to always neglect that there is a fee involved, and that the
numbers don't work out if they consider that as their profit station.
So what that means is, every order that they receive, they're going to end up losing money
on these orders if you do not understand how do you manage them properly.
It is very crucial for you, if you want to work with these delivery apps, to have a separate
exclusive menu just for delivery.
I know some delivery apps do not allow you to change up your menus, but this is very
common practice that people use exclusive menus specifically for delivery.
So have a new menu specifically for that.
You need to work out menu items that are high in margin and easy to produce.
That gives you the flexibility and the room to play with, and for you to be able to bring
in new customers, okay?
So have a different menu that has high margins and easy to produce specifically for these
delivery apps.
So for example, if you're a dessert place, then you'd possibly want to sell brownies
would cost you $0.40 to make and sell them at $5 a pop.
That is super easy, you just need to grab, pack it, boom.
It's good to go, and the margins are there for you.
On the contrary, the third common pitfall is that people choose the app that gives them
the lowest percentage.
Now, you need to understand that these apps are a big representation for your brand.
So if these apps don't have a good quality of their customer service, if they have a
shitty interface, that is a direct reflection on your specific brand.
And at the end of the day, if you can give them a good experience, if they feel like
the user interface in these apps are amazing, it is much more highly likely that they will
come back to your restaurant, that they will be along term loyal customer for you.
So choose an app that has a good interface, that has good customer feedback and good customer
support.
It is worth the couple percentage.
Common pitfall number four, neglecting the food quality and the food nature.
So many business owners have this oversight.
They just think that, "Hey, you want something with high margins, something that is quick
to make."
It's amazing when they to be as a menu for delivery apps, but a lot of times they need
to understand and really study, "Is this item good for delivery?
Is it going to be good by the time that it goes through your customer's hands?"
So for example, if I'm selling french fries, it's probably not a really great idea to use
these services or have this as part of the menu item that we have, because by the time
it arrives to your customer's hands, it's going to be soggy it's going to be gross,
it's going to be stale, and your customer's not going to have a good experience at all.
So what that means, is that it's a lose-lose situation.
You're gonna be losing in terms of the percentage, and your customers are not going to come back
for you.
You just lost completely because of this oversight.
So make sure whatever item that you decide to put on the menu, it is good and it would
retain its quality after delivery.
Be mindful of this.
Pitfall number five is treating your delivery app clients, the customers, like your regular
customers.
You do not want to do that.
In the beginning of the video, we talked about the importance of utilizing this strategy
to pull in long-term customers.
You're not treating the delivery app customers like any other customers.
You need to treat them and you need to pull them and convert them into your loyal
base, because if you don't that, you're going to lose our on your margins.
In the long term wise, this is not a feasible strategy that you should employ, because if
your delivery app person and app, they're already charging 30% off the top.
You have no margins at all, so it's super important for you to understand that you don't
treat these customers like any other customers.
You need to treat them like, "Hey, this is a new set of eyes.
How can I convert them?
How can I bring them in the store?"
So for example, when you're working with these customers, you'd want to maybe slip them a
coupon for every delivery.
Slip them a coupon that's like a free drink when you dine in.
So that acts as a really good motivation for these people that try your product.
They love your quality of your food, and now it gives them a reason to come to your restaurant.
And on top of that, it becomes a win-win situation.
You've just gained a long-term customer.
Be creative.
Change them.
Convert them from the delivery app customer to a long-term loyal fan.
These delivery apps is an amazing strategy and tool for you to bring in new customers
to your store.
So much customers if it's done right.
Now, on the other hand, if you do not utilize this tool properly, for every order that you
sell, you're going to be losing money, and it's going to run you to bankruptcy.
So it is super important for you to be aware of the coming pitfalls and do your best to
leverage these tools for your benefit.
And below, I've attached the common pitfalls for your use, so you can bring in so much
more customers to your shop and profit a lot more.
Download them and use it to your advantage.
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I'll see you guys in the next video.