Delivery platform commission is a marketing cost

Aug 22
4 min read

Updated: 2 days ago

Introduction

For a lot of restaurants, delivery platform commission is the largest single marketing expense in the business — and it appears nowhere in the marketing budget.

It is filed as a cost of sale, so it never gets compared against advertising, and the comparison is the one that would change decisions.

1. Delivery platform commission is an acquisition cost

What are you actually buying? Visibility to people who do not know you, a transaction, and a delivery.

The first of those is advertising. A platform charging 25% to put you in front of nearby customers is selling reach, and it should be judged against every other way you could buy reach.

Filing it under cost of sale hides that entirely, which is why so many operators pay a rate they would never accept from an ad platform.

2. Work out the real cost per order

Commission is the headline. Total the rest: promotional funding the platform asked you to contribute, discounts you agreed to, packaging, and payment processing.

Then set that against the gross margin on a delivery order — remembering delivery baskets often have a different mix, and sometimes lower margin items, than dine-in.

Do that arithmetic once. Many operators discover certain items are loss-making on delivery and profitable in the room, which is a menu decision rather than a marketing one.

3. Compare it with your other channels on the same basis

Once you have cost per delivery customer, put it in the same table as everything else: cost per customer from paid search, from social, from your Business Profile, from referrals.

Sometimes the platform compares well, particularly for reaching people who would never have found you. Sometimes it is several times your next most expensive channel and nobody had noticed, because it was never in the table.

You cannot make this call without doing the comparison, and the comparison is cheap.

4. Separate acquisition from repeat

The important distinction. A platform introducing a brand new customer is doing something valuable. A platform taking 25% from a regular who already knows you is expensive intermediation.

If a meaningful share of platform orders come from repeat customers, the commission on those is almost pure loss — you are paying acquisition rates for retention.

Look at repeat rates on the platform if it reports them. That number decides whether the relationship is worth its cost.

5. Make the direct route genuinely easier

Most attempts to move customers direct fail because direct is worse. The app is smoother, the tracking is better, the checkout is one tap.

If you want direct orders you have to earn them: a working ordering page, honest delivery times, and a reason to bother — a slightly better price, a larger portion, a loyalty stamp that only counts on direct orders.

"Order direct to support us" is not a reason. Give people something they get.

6. Use the platform for what it is good at

The pragmatic position is not abandonment. It is using each channel for its strength.

Platforms are good at introducing you to new customers in your area, and at covering periods you could not otherwise fill. They are poor value as the permanent route for people who already choose you.

So: accept the commission as an acquisition cost on genuinely new customers, and work steadily on converting those customers to a direct relationship afterwards.

7. Capture the customer while you can

Platform orders often mean you never learn who the customer is, which makes retention impossible.

Whatever the platform allows, use the physical order to bridge it: a card in the bag with a direct offer, a QR code, a stamp card. That converts an anonymous transaction into someone you can reach again without paying commission.

This is the highest-return five seconds in delivery, and it is usually skipped.

8. Review the rate and the tiers

Commission rates are not always fixed. Tiers, promotional periods and negotiated rates exist, particularly once you have volume history.

Ask. And reconsider participation in platform-funded promotions with the real arithmetic in front of you rather than the projected order uplift — the uplift is usually real and so is the margin it consumes.

Conclusion

Count delivery commission as a marketing cost, total the real cost per order including promotions and packaging, and put it in the same table as every other channel.

Separate genuinely new customers from repeats, since commission on a regular is close to pure loss. Make the direct route genuinely better rather than merely asking, capture the customer with the physical order, and review your rate rather than assuming it is fixed.