Most ordering and delivery platforms, such as GrubHub or UberEats, take a large portion of revenue every time a customer places an order. This chunk of change, often referred to as a commission, can quickly eat away at your business’ profits.
Unfortunately, it can be hard to get away from this business model. Once commission became commonplace in ordering and delivery software, it made it difficult for small businesses to find an alternative. After all, you probably don’t have funds lying around to pay to build your own ordering and delivery app.
But, getting away from a commission-based model is a must.
We’ll take a look at the six key reasons why commissions suck and why it is well-worth finding an alternate model for your end-to-end ordering and branded commerce options.
1. You Get Less Total Revenue for Your Business
Every single order placed online should result in your business receiving more revenue. The problem is that when you use most third-party platforms, a large chunk of your revenue goes to the third party.
That means even when your restaurant or small business is producing an increase in orders, you might not be seeing a large increase in profits.
For most small businesses, any loss in revenue is a cause for concern. Odds are good that you’re operating within a thin margin of profit. You can’t afford to lose a portion of your revenue every time an order is placed.
Not only that, but many third-party platforms charge you an additional marketing fee on top of commission. While this may seem like it’s the only way to get your business in front of customers, it makes it even harder to turn a profit.
The end result is that many small businesses and restaurants are pulling away from online orders altogether. It’s simply too high of a cost to pay. But these businesses risk losing out on an important sector of their target audience.
2. You Become Dependent on an External Source of Customers
With third-party marketplace apps, you are heavily reliant upon their customer base for your own business. If they see an uptick in users of their platform, great, but if they don’t, you could wind up seeing a downturn in your own business.
Any time your business is dependent on a third party for something as important as your source of customers, you put your entire business at risk.
What happens if the ordering app you are using goes through a major upheaval in their business? What if their customer base stops trusting them due to a data breach?
These realistic scenarios can put your business in jeopardy. When a third-party platform sees a downturn in business, you might also see a major downturn in your own business.
3. You Don’t Market and Grow Your Brand
Every time a customer places an order through a third-party app or online platform, they are greeted with that business’ marketing and branding. You have little control over what that customer sees about your business, and you are limited in how much you can market your own brand.
Instead, your brand is placed alongside your competition while the third-party platform grows its brand reach.
This can make it extremely challenging to market and grow your brand. Customers will have a hard time remembering your business when it’s always showcased alongside countless similar options. And it’s hard to increase your reach when you’re limited by the platform’s structure. Often, to grow your brand, you have to spend more money with a third party, attempting to promote your brand above others in the area.
4. You Don’t Own Your Customer Experience or Data
When a customer grabs their phone, opens up a third-party marketplace app, and places an order from your business, you have very little, if any, control over what that experience is like. Did they find your menu easy to order off of? Did they have a seamless experience when making their payment? What did they think about the speed of delivery?
Realistically, when you use a third party, you have no insights into any of these questions. And even if you find out that something is less than satisfactory, you can’t do anything about it. You no longer own your customer experience. This can lead to frustrations with your brand that are entirely out of your control.
Additionally, when a customer logs in to a third-party platform, all of their information is owned by that third party. You are not privy to customer behavior or demographic information, and you have no control over how their data is managed. This can limit your ability to grow your business, as you are missing out on critical customer information. It can also create a headache if your customers’ data is ever breached. You have no way of protecting their data, but a security issue could tarnish your brand.
5. You Are Working to Make Other People Money
You probably started your business because you have an entrepreneurial spirit. You wanted to control your income, and you wanted your business decisions to influence what money you make.
When you use a third-party platform for end-to-end ordering and deliveries, you are now working to make someone else money. Large corporations now control your customers and profit off of them. All those years of hard work you put into building your name in the community only serve to profit someone sitting in a large office hundreds of miles away.
This is not only frustrating, but it can be downright disheartening as you and your staff work to make ends meet during challenging times.
6. You Don’t Control Your Reputation and Direct Relationship with Customers
Your reputation and relationship with your customers are central to creating a long-term loyal customer base. When you use a third-party platform to manage your orders and deliveries, you lose control of your direct relationship with your customers. You can’t have a conversation with your customers, you can’t address concerns and issues, and you can’t manage your reputation.
Instead, if your customers are upset, they have to turn to a third party for resolution. Over time, you can lose customers without ever knowing why or having the chance to resolve issues.
Long term, this can take a toll on your local reputation. People might begin to associate you with a negative experience they had that was entirely the fault of the third-party app.
Try Ally and Pay ZERO Commission
At the end of the day, at Ally, we believe that commissions suck!
We believe in giving the power back to small businesses by helping merchants with an integrated eCommerce solution. From white-label apps to a user-friendly admin portal, we help you create an easy-to-use comprehensive solution for your brand and business. Additionally, our end-to-end ordering capabilities provide a seamless experience for your customers while making it easy for your staff to manage everything all in one place.
And the benefits are immense:
- Businesses using Ally collect an average of 40% more revenue
- When you use Ally, you can tap a nationwide network of more than 90,000 delivery drivers without commission costs
- And Ally allows you to build direct relationships with customers that keep them coming back for more
Try Ally today and enjoy the benefits of ditching commissions.