Imagine living in the 2000s or decades that preceded it. Those were the days where we had to rush to the nearest restaurant before it got closed or worse, one had to make their own meal despite them not having any mental or physical energy to do so. Thanks to the advancement of the tech domain, a lot of things about our life and lifestyle have changed. It is an undeniable fact that online food ordering has made our lives a lot easier in the last few years. Food ordering apps and aggregator apps give us access to a wide range of restaurant outlets and get the desired food delivered right at the doorstep.
However, based on the recent trends, it is observed that there exists a huge gap between online prices and the offline prices- i.e., the in-store cost of the food that’s being ordered via aggregator apps. The restaurants are made to pay higher commission rates to these aggregators which in turn gets reflected in the customer pricing who places the order online. A popular daily in India stated their observation that the restaurants jack up the prices from 10% to 60% for online ordering compared to their in-store prices. Now that the food packing charges may also cause a 3% to 5% hike to the online price which feels like there are so many financial addons in their platter to deal with, (pun intended!).
To begin with, these aggregators earn revenue from restaurant commission rates, ad-sales and ALSO via customer delivery charges. Costs may include discounts and other variables like taxes etc. In an interview to an online daily, a popular aggregator app said that, “commissions are part of the commercial construction and are mutually agreed upon while finalizing the contract”. The hidden cost matrix of online ordering has more to it than what one orders for. The food one orders, the service fee to the restaurant that packs the food, the taxes based on local tax laws, the delivery charges one got to pay to their preferred aggregator and the gratuity fee which is optional still costs some bucks… Yes, these are all one pays for when one intends to use an aggregator platform in recent times to order food.
With these charges already on cards, the high commission rates and profit margin needs of aggregators catching up with the order price makes the premise worse for people using such platforms. Though their customers are willing to pay prices on any online orders in proportion to the benefit that arrives out of cost escalation in comparison with the offline costs, it could snap and backfire if the escalation is higher than the proportion of benefits. The current ecosystem for online food delivery is highly monopolized or cartelized, but with more and more network partners offering their services on the open network without any prior filters applied, this escalated situation might improve. As a result, many restaurants would either launch an application where customers can order with personalized discounts or try to entice customers without any delivery charges.
This is where safe spaces for both merchants and customers, like Magilhub, come in. Magilhub is nothing like how an aggregator platform functions. Here, the restaurants get a virtual address where customers can reach them online. There is no third-party interference by Magilhub between the merchants and their customers. The restaurants also own the customer’s complete data that aids the merchants to analyze the trade insights for betterment of business. All these with the best economical option in the market as our business model paves way for the customers to order food online merely at in-store pricing which shall be delivered through valet apps or even through take-aways. Magilhub is primarily a SAAS platform that offers end to end POS and restaurant management solutions at one stop.
To get to know us more and to book a demo, visit us at: http://www.magilhub.com
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