With the advent of the COVID pandemic, failing restaurants and desperate restaurant owners needed to find creative ways to get more orders and stay afloat. Many restaurateurs turned to third-party aggregator websites like Grubhub, Doordash, and Ubereats to drive sales and increase orders, but at what cost to the restaurant?

While third-party aggregator websites have been operational way before the pandemic, their popularity and profit margins skyrocketed amid governments' numerous restrictions.

Today, we will take a deep dive into the advantages and disadvantages of using a third-party aggregator website and more suitable alternatives to these types of websites.

What is a Third Party Aggregator Website?

Third-party aggregator restaurant websites are, as the name suggests, they are websites that host different restaurants on one platform.

Restaurant owners would fill out an application and submit their menus to get listed on the website for a certain fee, which is usually a percentage of the food order.

Food clients would then choose from the wide variety of restaurants listed and order at their preferred restaurant. Once the restaurant accepts the order, the third-party aggregator fulfills the delivery.

Advantages of Third Party Aggregator Websites

Perhaps the only advantage of using an aggregator website is convenience to food clients. While browsing through the thousands of restaurants on these websites, clients may stumble upon your restaurant and seamlessly order food for delivery without being redirected to another website.

On the other hand, being listed on a website that has so many options to choose from, clients or prospective clients may easily bypass your restaurant for one with a more favorable rating.

Disadvantages of Third Party Aggregator Websites

High commission rates

The main disadvantage of these websites is that they all charge extortionate commissions to restaurateurs.

According to a recent article posted in the New York Times, food clients can expect to pay up to 49% more when ordering from third-party aggregator websites than if they were to order from a restaurant's in-house ordering system.

In addition to taxes and commissions, third-party apps usually add another surcharge for orders that are placed below a specific value. This means that for a restaurant to remain profitable, it would have to increase its prices to compensate for the additional cost.

However, the increase in prices does not trickle down to restaurant owners; it goes directly to the third-party aggregator website to cover the fees and commissions they charge.

Loss of control

With your customers ordering from third-party aggregator websites, you lose control of some aspects of your brand's identity.

For instance, if one of your food clients is dissatisfied with the delivery of an order, they could give your restaurant a bad rating, and you would have no way to respond to the negative feedback.

Finding out the exact reason for a negative rating gives you a chance to improve the areas in which you are falling behind.

Ownership of customer data

Another downside of using a third-party aggregator website is losing access to your customer's data. A restaurant's most critical asset is its client list; this helps them determine who the loyal customers are.

Restaurant owners can use this information to design promotions and reward return clients' loyalty or get first-time clients to order from the restaurant again.

Third-party aggregator websites do not typically provide this information to restaurant owners; instead, they use the information to run targeted ad campaigns for your client base.

What Can You Use Instead of a Third Party Aggregator Website?

So you've decided that using a third-party aggregator website is not ideal for your business. You want to increase your sales while providing your customers with the convenience of ordering from the comfort of their homes; In-house ordering systems are the way to go.

Over the past few years, there has been a steady increase in the number of in-house ordering solutions available on the market. Picking the right one for your restaurant can be tricky, so ensure you weigh all the pros and cons before committing.

Advantages of Using an In-House Ordering System

You keep all the profits

The most notable benefit of ditching third-party aggregator websites and using an in-house ordering solution is that you retain a more significant margin of your profits by eliminating the high costs that are usually associated with these portals.

The cost of your online ordering system will vary depending on which system you use. Some in-house ordering solutions may require a monthly subscription, while others charge a one-time setup fee. These costs are often minimal, and all the money you get from orders go directly to your pocket.

You have full access to your client's data

Having access to your client's data lets you know who your clients are, what your most popular dish is, and most importantly, who your most loyal customers are.

Returning customers are a lifeline of the restaurant industry; therefore, you should do everything in your power to ensure these customers keep coming back to your business.

You can also use the list to interact with your clients directly and design advertising campaigns that are more tailored to your audience.

You have complete control over the ordering experience

When you control the ordering experience, you can fully customize your menu based on your brand's identity.

You also take ownership of the delivery aspect of your operation; this means that if there is an issue with the order, your clients will be able to communicate that directly to you.

Controlling the ordering experience helps build brand loyalty which translates to more orders and better relationships with your customers.

Conclusion

Third-party aggregator websites are a double-edged sword; on one side, you have the benefit of being listed on a heavily trafficked platform where the probability of increasing your orders is elevated.

On the other side, exorbitant fees, commissions, and made-up surcharges force you to raise prices in an already struggling economy.

In-house ordering systems are an extremely affordable alternative that features a host of other pros when compared to third-party aggregator websites.