Third-Party Delivery Services: Friend or Foe?

Third-party delivery services are changing the restaurant industry. While previously only foods like pizza or Chinese food offered delivery, now customers expect to be able to get almost any food delivered to their home. Many restaurants have started working with third-party services instead of managing their own delivery, which comes with its challenges as well as advantages. Here are some of the pros and cons that you need to consider before adding your restaurant to a third-party platform.

Disadvantages of Third-Party Delivery ServicesRestaurants are notoriously low margin businesses and the cost of using a third-party delivery service can be prohibitive. These services typically charge 30 percent of the sale, so when you combine this with a 30 percent food cost, plus a 30 percent labor cost, the margin is pretty low. Add your operating costs and the margin goes down to almost zero.

Each third-party delivery service has its own platform. These platforms have to be integrated into…