Learn about the two different types of online ordering systems available for food businesses and which is best for you
Choosing an online ordering system to use for your restaurant can be daunting with all the options available.
As a restaurant owner, by now you probably have come across two different types of online ordering systems. That is marketplace systems and self-service systems.
While they both fundamentally do the same thing, the business model behind those services have a huge impact on your online ordering performance.
Please keep in mind that the information in this article is only as accurate as the date it was published at. Things are subject to change with time
Marketplace online ordering systems
This is where the bulk majority of restaurant owners start. Marketplace ordering systems are those like Deliveroo, EatNow, Menulog, Uber Eats, Foodpanda etc. You can consider these platforms similar to those like eBay and Etsy.
Generally, these businesses will reach out to you first. They upload your menu online and enable you to start accepting orders straight away. They also do large amounts of promotion and marketing to drive traffic to their website to generate sales for their stores.
The way these systems make money is by taking a % of each order that is placed through their system. While this is generally the easiest route to getting online, it’s also the most expensive. The restaurant industry is one of the most competitive industries with low-profit margins. Losing a % of each order, and not just 1-3% but generally 5-20%+ can be very impactful to your financial bottom line.
Most restaurant owners will start off with these services but soon come to this realisation and start looking for alternative solutions. That said though this is not an entirely bad. Ideally, with all the marketing these businesses do, they are able to generate you some new customers that you might not have otherwise had.
The reverse situation can be true as well where your regular customers start ordering online through these sites at which point you start losing a large portion of your regular sales. Which is why it’s important that you use marketplace ordering systems in conjunction with self service online ordering systems.
Self-service online ordering systems
The rise of the self-service online ordering system is because of its significantly cheaper price compared to marketplace systems. Generally, these systems charge a fixed monthly cost and/or a setup fee. This however works out to be much cheaper than paying a % of each order.
These systems essentially allow you DIY your own online ordering system. You can compare them to e-commerce solutions like Shopify and Bigcommerce.
Aside from the lower cost, the other advantage of these systems is they generally allow for a greater degree of customization and loads of more features
If you plan on adopting online ordering, then its absolutely critical that you use a self service online ordering system first and then jump on market place systems.
What type of online ordering system should you use
The ideal solution is to utilise both types of systems. Marketplace systems cost you nothing to be on and they receive huge amounts of advertising and promotion. To get to be a part of that for no initial cost is a huge benefit. You should view marketplace systems as a way for new customers to find and discover your business
However, once you convert a customer to a loyal regular customer, its best push them towards using your own online ordering system. This is because you can save a significant amount of money and also manage the order data appropriately using it to your advantage.
We recommend you check out our blog sponsor for your online ordering needs.