Third-party food delivery services have brought an unprecedented level of convenience by modifying supply chains for restaurants. Restaurants can function with greater efficiency working with third-party websites, since the burdens of taking orders and delivering the food have been outsourced.

Although there are numerous advantages of seeking an arrangement with third-party websites, there is a risk associated with shifting the burden of a large part of your consumer base to another vendor. Consider the statistics :

·Restaurant-to-consumer delivery revenue was USD 15,022 Million in 2018.

·The market is expected to grow by 7.3% by 2023.

·User penetration is 20.2% and will grow to 25.7% by 2023.

·Average Revenue per user is USD 226.45.

This implies that on average a restaurant gives away the management for a fifth of all its business to a third-party website, a number which will grow to a fourth of all business. Given the existing deficiencies within the supply chain mechanisms of third party food delivery websites, restaurants are risking a large part of their business to experience possibly disastrous consequences.

The inability of third-party delivery websites to coordinate with restaurants, to maintain a standard of quality and take commissions out of the service are not offset by the convenience these offer, considering the potential loss of business.

In fact, a third of all customers already report dissatisfaction with third-party food delivery , which often spills over onto perceptions about restaurants. The specific ways in which the use of third party food delivery websites can stifle business are:

Service Charges

Food delivery services tend to charge a high premium for their service. Uber Eats charges a massive 30% service charge on all order placed through its platform.

A restaurant has the option of passing on the burden to the customer, which means prices on all orders go up 30 percent or restaurants bear the burden. For every order worth $10 and 20 orders a day, a restaurant pays $60 a day to the Uber Eats, implying an average of $1800 to be paid to Uber Eats a month. Supply chain costs will simply continue to grow as restaurants increase their consumer base; this puts them in paradox of evaluating the decision to grow.

Lack of Co-ordination

Sometimes third-party delivery websites fail to mention if restaurants are open for business. Considering that restaurants do not or cannot disclose operational plans to service providers, customer orders have to be cancelled and refunded which often reflects poorly on the restaurant.

Similarly, websites may list restaurants in zip-codes that lie outside the restaurants delivery areas. Customers find it immensely frustrating to have their orders cancelled and the tardiness with which orders are cancelled due to delays in correspondence between the third-party and the restaurant.

Unintended Competition

Third-party online food ordering software and websites construct a competitive paradigm by listing competitor restaurants at their websites. While the consumer can make more informed choices, restaurants find themselves pit against competition trying to vie for orders while their competitors are listed right next to them.

The downside is that restaurants stand to lose out on existing customers, since they cannot exert greater control over their branding and marketing strategies when listed on third party websites that could differentiate them from competition.

Supply Chain Shortcomings

While it is a relief that the responsibility of maintaining a smooth supply chain and sustaining associated costs has been passed on to someone else, there is no guarantee that the delivery service will, ironically enough, deliver.

For a restaurant, sustaining efficient logistics is a key component of quality assurance. Restaurants are left at the mercy of the alleged logistic excellence of third-party websites, which may not always comply with standards required of the restaurant.

Slower Updates

Introducing an intermediary in the interface between the customer and restaurant poses the risk of not being able to inform customer on updates regarding restaurant activities in a timely manner. Information such as changes in the menu, operational hours or new offers are not updated as quickly as they may on in-house websites.

Given these factors, restaurants are probably better-off hosting their own websites than relying on third party websites that introduce business considerations that are simply avoidable. For all the convenience these websites offer, there is much to be said about the price of this convenience.

Customer Contact Solutions is a web design and development agency based in London , Toronto , Ontario. They offer SEO , web design services and specializes in the creation of food delivery websites for restaurants .