What each delivery platform really costs you

Ask most owners what a delivery platform costs and you'll hear one number: the commission rate. But the rate is only the start. Two platforms with the same rate can cost you very different amounts.

What makes up the real cost

• The commission rate, and just as important, what it is charged on: what the customer paid, net sales, or sales before discounts. The same rate on a different base is a different cost.
• Fees per order, which add up fastest on small orders.
• VAT on the fees, which you may or may not be able to reclaim, depending on your VAT registration.
• Discounts you fund. A promotion run on the platform is often paid partly or fully by you.
• Different terms for different branches or brands. Many restaurant groups have more than one deal on the same platform.
• Terms that change. A new rate from a date means last month and this month are not comparable unless each is priced on its own terms.

Why one average rate misleads you

It's tempting to work with one blended percentage across all platforms. It's simple, and it's almost always wrong. It hides the platform that is costing you the most, makes your cheapest channel look more expensive than it is, and makes it impossible to price or promote each channel on its own merits.

How to see the true cost

• Write down each platform's terms: rate, base, fee per order and VAT on fees, with the date they started, for each branch and brand.
• Price every month of sales on the terms that applied that month.
• Compare platforms on what they leave you per order and per month, not on their headline rate.

Do this once and you have a clear basis for negotiating with each platform, setting prices per channel, and deciding where to put your promotions.