Food delivery app commission: what independent stores should ask
How delivery app commission tiers work, the costs that sit beyond the headline rate, and six questions an independent store or restaurant should ask.
For an independent grocery store, restaurant or food truck, a delivery app can add orders you would never have seen. It can also take most of the margin on them. The difference is in the details of the deal, and the headline commission is only the first of them.
How delivery app commission works
The large delivery apps sell tiered plans, commonly 15%, 25% or 30% of each delivery order. The cheapest tier usually comes with a smaller delivery area and less visibility in the app, so stores that want to be found end up on a higher tier. On a grocery basket with thin margins, a 25% to 30% cut can exceed the profit on the order.
The costs beyond the commission
- Setup or activation fees, and monthly software or tablet fees.
- Card processing charged on top of the commission.
- Paid placement and promotions that become necessary to stay visible.
- Refunds and order errors charged back to the store.
Six questions to ask before you list
- What is the all-in percentage once processing, marketing and fees are included?
- Who else in my category will be shown next to me? On most apps the answer is every competitor nearby.
- Who owns the customer? Can you see who ordered and reach them again?
- How do orders reach me? Another tablet on the counter, or the phone you already carry?
- Can a customer combine my store with others in one order? If not, you only win the orders that start with you.
- How fast, and how, am I paid?
How Urban Green N More handles it
Urban Green N More is our Milwaukee food marketplace, built for independents. Vendors pay the lowest commission in the industry with no setup fee, no monthly fee and no hidden fees. Each vendor holds its category for five miles, so a second store of your speciality is not added next to you. Customers fill one basket across several vendors and check out once, and orders land on your phone or on WhatsApp. See open zones on the Urban Green N More site, or get the app on the App Store or Google Play.
If most of your customers already message you, read how WhatsApp ordering works for restaurants next.