How Online Ordering Affects Your Profit?
Approaching the latter half of 2020, it’s absolutely safe to say that online orders generate significantly more revenue for your business. It’s such a well-established fact that we don’t even have to look at the research, statistics, and numbers to prove the success of online ordering.
Now that we know it can skyrocket our revenue, the question that comes to mind is whether or not online ordering is boosting your bottom line as well. It’s true that a revenue stream brings in additional money but that doesn’t necessarily mean that there’s no more spending on maintaining the new stream.
Every business owner and restaurateur knows that the profit conversation has more worth than anything else. How do you know that your online platform is earning profit and not a burden on your profit margin? Let’s take a look at your numbers for your online platform and do some simple math regarding profit and loss.
How Much Does Your Online Ordering System Costs You?
Current marketing research shows a considerable rise in customer satisfaction and loyalty when online ordering is simple and easy to use. This is particularly true among the millennial, whose members are highly attached to online ordering as their go-to method. Anyway, how much of your profit are you sharing every month for those online orders received by a third party along with a service fee?
The Irresistible Cut
While the description may portray your service provider in a negative way, their service charges are devilish if you want to serve that huge millennial market. If you engage a third party to process and deliver your online orders from a website or an app, they will charge you per order to earn their living.
However, if you take the total number of your online orders each month, those fees can absorb your profit margins easily. Greater number of orders increases your potential output and revenue sharing with your third-party service provider, reducing your net profit. Ever wondered how much is the devil’s cut for your business?
Do The Math!
Calculate your average pre-tax total per order and subtract your third party service provider’s percentage. Now, from that total, deduct the average expense of discounts/promotions to attract new customers online and encourage bigger digital orders. Have a total?
Next, deduct your average cost per meal plus the cost of preparation, including your staff’s payment. What’s left of that average price? More than likely that net profit will either make your business unsustainable or will hold you from what you need to grow your business.
So much for opening eyes. So, what’s your plan now? Increase prices? Get rid of online ordering? Give away more discounts? Well, none of the above is the solution. There is a more elegant and simple solution to this problem despite the complexities.
The Way Out
Instead of appointing a third party service that you pay per order, you should be investing in your own secure online ordering system customized for your business that will not force you to share profit from every order. Instead, you’ll pay fixed charges every month for updates and security, as well as regular maintenance and improvements in POS integration.
Oscar’s eCommerce platform is a reasonable and affordable solution for your online ordering business. Takes a maximum of 1 day to set up. Don’t have a website? Don’t worry, we got you covered. You can have your website up and running in no time. If you have a website, you can easily link your existing website to your online ordering site. When visitors type in your web address, they will immediately reach your online store.
Still confused? Get your free trial now!