Is Online Ordering Profitable for Restaurants?
Online ordering is highly profitable when done right. Direct/commission-free ordering adds 20-35% to order volume with full margins. Third-party delivery apps (15-30% fees) often break even or lose money. The key is owning your ordering channel to keep 100% of revenue.
In This Article
Quick Answer
The Profitability Equation
Real Numbers: Direct vs Third-Party
Why Direct Ordering Is More Profitable
When Third-Party Apps Make Sense
How to Maximize Online Ordering Profitability
Quick Facts
Related Questions
More FAQs
Quick Answer
Online ordering has become essential for restaurants, but profitability varies dramatically based on how you implement it. Let's break down when it makes money and when it doesn't.
The Profitability Equation
Online ordering profitability depends on your channel and costs:
| Channel | Commission | Profit Margin | Verdict |
|---|---|---|---|
| Direct ordering (own site/app) | 0% | Full margin | Highly profitable |
| DoorDash/UberEats | 15-30% | Reduced 40-60% | Often unprofitable |
| Pickup orders | 0% | Full margin | Most profitable |
| Delivery (own drivers) | 0% + labor | Good margin | Profitable |
| Delivery (third-party) | 15-30% | Low margin | Often break-even |
Real Numbers: Direct vs Third-Party
Let's compare a $50 order across different channels:
| Line Item | Direct Order | Third-Party App |
|---|---|---|
| Order Revenue | $50.00 | $50.00 |
| Commission Fee | $0.00 | -$15.00 (30%) |
| Payment Processing | -$1.50 | -$1.50 |
| Food Cost (30%) | -$15.00 | -$15.00 |
| Gross Profit | $33.50 | $18.50 |
| Profit Margin | 67% | 37% |
Why Direct Ordering Is More Profitable
Owning your ordering channel has compounding benefits:
• Zero commission fees = keep 100% of revenue
• Own your customer data = targeted marketing
• Build your brand = not a commodity on marketplace
• Control the experience = higher satisfaction
• Repeat customers = lower acquisition costs over time
• Upselling opportunities = higher average orders
When Third-Party Apps Make Sense
Despite low margins, marketplace apps serve a purpose:
• Customer discovery/acquisition (treat as marketing expense)
• Testing delivery demand before investing in your own
• Filling slow periods with incremental orders
• Reaching customers outside your delivery zone
• But: Always work to convert to direct ordering
How to Maximize Online Ordering Profitability
Follow these strategies for best results:
• Prioritize commission-free direct ordering
• Use third-party apps for acquisition only
• Convert delivery app customers to your platform
• Implement loyalty to drive repeat direct orders
• Optimize menu for items that travel well
• Focus on pickup orders (no delivery cost)
• Track and optimize average order value
Quick Facts
60-70%
Direct Order Margin
30-40%
Third-Party Margin
70%+
Pickup Order Margin
20-35%
Online Order Growth
More Frequently Asked Questions
What is a good profit margin on online orders?
For direct/commission-free online orders, aim for 60-70% gross margin (similar to dine-in). For third-party delivery apps, 30-40% is typical after fees, which may be break-even for many restaurants.
Should I charge more for delivery orders?
Yes, most customers expect to pay slightly more for delivery convenience. A delivery fee of $3-7 or 10-15% higher menu prices for delivery is acceptable and helps maintain profitability.
Is pickup or delivery more profitable?
Pickup is more profitable because there are no delivery costs. Encourage pickup with faster times or small incentives. When offering delivery, use flat-fee delivery services rather than commission-based apps.
Make Online Ordering Profitable
RestauNax lets you keep 100% of your online order revenue with zero commission fees. See how much you could save.