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Pros and cons of third-party delivery companies

As you reevaluate your use of third-party marketplaces, consider these pros and cons:

Pros

  • OUTSOURCED OPERATIONAL RESOURCES: Free up time and resources by outsourcing logistics, fulfillment, shipping and delivery to businesses with deep expertise and extensive assets.
  • GREATER POTENTIAL REACH: Find new customers you may not be able to reach on your own, be discovered more easily and build your brand recognition.
  • OPTIMIZED SEARCH & CONVERSIONS: Large marketplaces often dominate the world of search, products are easy to find, and the purchase process is simple and easy, leading to more sales.

Cons

  • INDIRECT CUSTOMER RELATIONSHIPS: Putting a middleman between you and your customers means less communication and data to inform your menu development and other business decisions.
  • LOWER QUALITY MANAGEMENT: When you lose control of pricing, fulfillment and quality control, you run the risk of a lower overall experience.
  • LACK OF BUSINESS CONTROLS: The rules and policies of marketplaces can change without warning, leading to logistical issues such as delayed deliveries.
  • LOWER SALES MARGINS: Profit margins tend to shrink due to additional fees and fulfillment costs.
  • MARKETPLACE COMPETITION: Some marketplaces use your sales and customer data to their own benefit by creating white-labeled products to compete with your most popular items.
  • BRAND RECOGNITION BARRIERS: It can be hard to get your brand to stand out, not only is there a lot of competition from other brands, you’re also having to compete against the marketplace’s own white-labeled products.

What’s next?

Attend a live workshop and hear our restaurant experts discuss how best to take advantage of the third-party platforms while minimizing the risks list above. There are live Q&A workshops on many topics related to growing your online restaurants. Check them out here.

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