Picture this: a late-night craving hits (been there), and you fancy a burger combo from your favorite local diner (yum!). But, as you open DoorDash to place your order, you notice the price is shockingly $5 more than it costs in-house. At first, that $5 difference probably seems worse than cold fries… but hang on.
Let us explain.
Restaurants that use third-party apps like DoorDash — including your favorite burger joint — are subject to as much as 30% in commission costs. Combine commission costs with the 7.7% year-over-year increase in food prices, and it makes perfect sense for restaurants to bump the base prices, right?
Not if you ask DoorDash.
How DoorDash is Changing
In a recent conversation with Restaurant Business, DoorDash let the world of restaurateurs know how frustrated app users were about the “inflated prices” on the platform.
As a result, DoorDash has said that any restaurants excessively marking up their prices will be penalized with lower visibility on the app…while their “consistent price” counterparts get priority.
To justify this algorithm switch, DoorDash has offered its own data-fueled insights as support.
Their research suggests that large discrepancies between your menu prices and your DoorDash prices mean 37% fewer sales, a 78% reduction in reorders, and a slew of negative reviews.
Whether or not those stats accurately reflect your restaurant’s experience with third-party apps, one thing is for sure — the way you use DoorDash is about to change in a big way.
What This Means For You (& What You Can Do)
So, if you’re one of the restaurants that have (understandably) upped their DoorDash prices to offset commission costs, what does the new algorithm really mean for you?
Unfortunately, not great things.
For starters, it means your restaurant’s visibility on the app is about to plummet. And, with reduced visibility comes reduced sales, with anticipated drops of up to 40%.
It also means that restaurants without raised prices are about to get shoved right into the spotlight. Not only will their visibility be boosted, but DoorDash is also testing out tags and banners to indicate which restaurants offer “consistent pricing.”
But, if boosting your prices on DoorDash is the only way your restaurant can make ends meet on the platform, there’s another option to consider — no algorithm penalty included.
Goodbye, Third-Parties – Hello, Custom App!
The best solution to third-party app commission costs, algorithm shifts, and high competition is surprisingly another app — but this time it’s your own.
Creating a custom app is a great way to leverage the power of online/digital ordering without the commission costs and penalties for price changes.
Just look at McDonald’s or Starbucks, for example.
In 2022, the McDonald’s app was downloaded 4.2 million times, and Starbucks’ Mobile Ordering has seen a consistent year-over-year increase of 13%. Pretty impressive, right?
So, if you’re looking for a custom app that lets you leverage digital ordering without hidden fees, commissions, or sale-lowering algorithm changes, Craver’s got your back.
A Craver app can be completely tailored to your brand, and your brand alone; no more touting third-party logos or competitor links. And, to make everything a dash sweeter, Craver has just one monthly fee, while the other guys charge per order… per month… and for delivery.
That 40% drop in app sales? Not on our watch.
Wrap Up
While third-party apps can be a great opportunity for amping up online orders, the reality is that their pricing — and their price limiting — is unsustainable for many restaurants.
When you create a custom app for your restaurant, the power of digital ordering is back in your hands; you make the rules and the sales.
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