Partner or Opponent
How a simple shift in posture can save an industry?
Yesterday I found this article on Forbes titled
Why Uber Eats Will Eat You Into Bankruptcy
One of the basic arguments of the writer is that, quote
The problem here is that the average profit margin for a restaurant is under 30%. Fast food such as McDonalds reported profit margins about 22% in 2017. Casual dining or family style restaurants have a profit margin between 5% to 10%. Lastly, full-service restaurants such as fine-dining have average profit margins of about 6.1%
By paying a commission of 35% to UberEats, the restaurant is loosing money on each order and this will eventually drive them out of business.
I would like to bring in another food ordering service EatNow into the mix, which charges 15% commission for each order, for online ordering. Apart from this EatNow also has encourages restaurants to bid against each other for a top spot on the list, this very idea of maximising profits by letting your partners fight against each other is not a healthy mindset.
This again eats into the already low profit margins of the restaurants, making it difficult to sustain.
If you win against your opponent, then you win and of course your opponent looses. That’s okay. But if you win against your partner, sadly both of you loose.
If EatNow and UberEats treat restaurants as partners and act in the best interest of the restaurants, they can milk the benefits for a very long time to come.
Instead if they continue treating restaurants as if they are opponents and try to maximise their profits by squeezing every penny out of each order, then they are winning against their partners and it’s the classic case of killing the goose that laid the golden eggs.
Go for the eggs, not the goose!
Zagl in a nutshell is an e-Shopping mall that offers mobile ordering for your cafe/restaurant for free. Our mission is to empower restaurants and cafes to accept online orders in a sustainable fashion by treating they as partners rather than as opponents, this simple shift in posture makes all the difference.
For more information checkout our getting started guide.