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Disadvantages with Grub Hub and Online Ordering Portals

Case against Online Ordering with Grub Hub

Are you looking for online ordering?  Considering GrubHub, Seamless, Eat24, etc? Those are adequate solutions, and depending upon your needs, may help with creating an additional revenue channel. However, let us consider the advantages and disadvantages with “online ordering portals”, specifically GrubHub.

 

Grub Hub

GrubHub is an established, large company with significant resources.  They can market your restaurant to potential customers.  You can begin to offer mobile ordering services, and expand the (not your’s however) customer base.  They also have delivery services available, too.  So what is not to like about GrubHub or other portals?

·         Pricing

They charge anywhere from 5% to 15% of the order’s net total.  So if a customer orders $25.00 worth of food, you would pay $1.25 to $3.75 in fees.  This eats (no pun intended) into your small margins.

·         Payment Settlement

When orders go thru GrubHub, you may wait up to 15 days to receive payment.  As a restaurant owner, this seriously hampers your cash flow.

·         Marketing / CRM Part 1

Remember the variable rate mentioned above for pricing? Well, the higher your rate, the higher you are on the search results, so if you want to pay 5%, you will be at the bottom of the search results, for say “pizza spots in Nashville, Tn”.  Not, to mention you don’t have access to the customer data, they do.  You can’t do analytics to understand your customer base, market to your customers, etc.. Which brings us to another point…

·         Marketing / CRM Part 2

You are competing against other restaurants for the same potential customer.  GrubHub and other portals, don’t care which restaurant potential customers order from (they prefer customers to order from the restaurants that are paying more in fees), because they will make $ as long as the customer orders from a GrubHub affiliated restaurant.  In addition, they email, create sms messages, etc to customers, to order from one of their restaurants.  So imagine, Joe Customer orders tacos from Bob’s Tacos in Panama City Beach, Florida using GrubHub.  He may get a marketing email, telling him to visit GrubHub again, and try these list of competing Taco spots in Panama City Beach.  So your single transaction, could lead to additional transactions for competing restaurants!

·         Control

Remember, as explained in marketing (see above).  It’s not your potential customers, its GrubHub’s.  You as a restaurant owner are outsourcing your carryout/takeout business. What if pricing changes? What if a menu option is no longer available?  You have to update GrubHub’s system, as well as your own.  What if you want customer data, it is your customers.  Nope, can’t get that information.

·         Hardware/Training

If you still want to do GrubHub, consider you will have to get additional hardware at each restaurant OR at least train you kitchen and wait staff to handle orders coming thru GrubHub.  You may even need to re-enter the order into your point-of-sale.  Decreasing efficiency, creating potential for errors, increasing labor cost, etc.  Who has money AND time for that?

If after all these factors, you still want to sign up with GrubHub, well, “We wish you success in your endeavors”. 

If you want to know about how we can help you create your own Point-of-Sale Integrated Online Ordering System, up to 80% to 90% of the cost of GrubHub’s, get paid immediately from your customer’s orders, be able to perform advanced data analytics for marketing, gaining control over the online ordering process, and not requiring additional hardware or training, visit us at http://ez-chow.com

 

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