In this post, we’ll compare these two approaches—delivery app reliance vs. in-house marketing—and illustrate their impact on a sample Restaurant P&L (Profit & Loss Statement). By the end, you’ll have a clearer idea of which path (or combination) might best protect your bottom line and fuel your restaurant’s growth.
Today’s restaurant owners face a pivotal question: Should we rely on third-party delivery apps to increase sales, or focus on our own marketing efforts? While apps like DoorDash and UberEats grant you immediate access to a large pool of hungry customers, they can command a 25% commission per order. On the other hand, investing in direct marketing—even if you only have a $1,500 monthly budget—can help you keep more revenue in-house and build a loyal following over time.
Advantages
Immediate Access to Customers: Increases your visibility among people actively looking to order food.
No Heavy Lifting on Your Part: The platform handles the technology, payment processing, and sometimes delivery logistics.
Built-In Marketing: Delivery apps often feature restaurants in their newsletters or “nearby” listings.
Drawbacks
High Commissions (25%): This fee can consume a large slice of your profit on each order.
Limited Customer Data: Generally, the delivery service holds the customer relationship and contact information.
Brand Competition: You’re one of many eateries listed, making brand loyalty harder to foster.
Advantages
You Own the Relationship: When customers come directly to you (online or in-store), you can gather emails, phone numbers, and social media follows.
Better Margins: Even if you spend $1,500/month on marketing, you avoid handing over 25% of each sale.
Long-Term Brand Building: Your marketing efforts create lasting brand equity and customer loyalty.
Drawbacks
Requires Continuous Effort: Content creation, social media engagement, and campaign tracking are ongoing tasks.
Initial Costs: Whether you hire a marketer or spend on tools, you’ll need some upfront investment.
Slower Results: Building a following can take time, so you may not see an immediate surge in sales.
Below is a simplified monthly P&L comparison, assuming $100,000 total revenue. Note how the 25% commission for delivery apps and varying marketing costs affect net profit. We compare two scenarios:
Scenario A: Heavy reliance on delivery apps (50% of sales through apps), minimal marketing ($500/month).
Scenario B: Moderate reliance on delivery apps (30% of sales through apps), higher in-house marketing ($1,500/month).
Scenario A
App Revenue: $50,000 (50% of total)
Direct Revenue: $50,000 (50% of total)
App Commission: 25% of $50,000 = $12,500
Marketing Spend: $500
Scenario B
App Revenue: $30,000 (30% of total)
Direct Revenue: $70,000 (70% of total)
App Commission: 25% of $30,000 = $7,500
Marketing Spend: $1,500
Line Item | Scenario A: More App Reliance | Scenario B: More In-House Marketing |
1. Total Revenue | $100,000 | $100,000 |
- Revenue Split | 50% apps ($50k), 50% direct ($50k) | 30% apps ($30k), 70% direct ($70k) |
2. Cost of Goods Sold (COGS) | $30,000 | $30,000 |
3. Gross Profit | $70,000 | $70,000 |
4. Operating Expenses | ||
- Labor (Wages & Benefits) | $30,000 | $30,000 |
- Rent/ | $10,000 | $10,000 |
- Marketing Spend | $500 | $1,500 |
- Delivery App Commissions (25%) | $12,500 | $7,500 |
(25% of $50k) | (25% of $30k) | |
Total Operating Expenses | $53,000 | $49,000 |
5. Operating Income | $17,000 | $21,000 |
6. Other Expenses (Loans, Taxes, etc.) | $2,500 | $2,500 |
7. Net Profit | $14,500 | $18,500 |
Net Margin | 14.5% | 18.5% |
High App Commissions vs. Marketing Spend:
Scenario A pays $12,500 in commissions and only $500 in marketing.
Scenario B pays $7,500 in commissions but $1,500 in marketing.
Net Profit Difference:
Scenario A finishes with $14,500 (14.5% margin).
Scenario B nets $18,500 (18.5% margin).
Long-Term Strategy:
Scenario B invests more in brand-building while still coming out ahead financially. Over time, direct marketing efforts can further reduce reliance on high-commission channels.
Diversify Your Sales Channels
Relying exclusively on third-party apps is risky; if their fees increase, your margins shrink further. Having multiple revenue streams fortifies your bottom line.
Build a Loyal Customer Base
In-house marketing campaigns (email newsletters, social media promotions, loyalty programs) let you directly engage with your customers—leading to repeat business without ongoing commissions.
Negotiate or Experiment with Multiple Apps
Some apps may offer reduced commission tiers for self-delivery or special promotions. Shop around to find the best fit and minimize fees.
Focus on High-Impact Channels
Prioritize Google Business Profile, local SEO, and social media ads targeted to your neighborhood. These typically yield solid returns for local businesses.
Email & SMS Marketing
Collect customer emails and phone numbers via online orders or in-store sign-ups. Send out weekly or monthly offers and updates—an extremely cost-effective way to drive repeat visits.
Encourage User-Generated Content
Run social media contests or ask customers to tag you in their posts. Reposting user-generated content not only saves on content creation but also increases authenticity.
Collaborate with Local Businesses
Co-promote events, provide joint discounts, or host pop-up nights with nearby retailers or community groups. This broadens your customer reach with minimal extra spend.
Track Your Return on Investment (ROI)
Monitor each marketing channel’s performance. If certain campaigns (e.g., Facebook ads) yield high sales, consider allocating more budget there.
As the P&L table shows, balancing your reliance on delivery apps with a modest investment in in-house marketing can lead to higher profit margins. Delivery apps can still be a useful channel, particularly for tapping into new or convenience-oriented customers. However, limiting app reliance and capturing more direct sales—even if you only spend $1,500 monthly on marketing—can reduce steep commissions and improve your overall financial health.
If You’re New: Apps can give you immediate exposure, but allocate part of your budget to in-house marketing so you’re not fully dependent on third-party platforms.
If You’re Established: Gradually shift more of your business toward direct channels to retain a larger share of revenue and cultivate loyal repeat customers.
The choice between relying heavily on delivery apps or investing in your own marketing isn’t black and white. Each approach has its pros and cons, and most restaurants find a hybrid strategy most effective. With apps charging 25% commissions, even a modest $1,500 monthly marketing budget can help you build stronger profit margins by reducing fees and growing a loyal customer base.
When planning your strategy, remember to:
Measure your results (App-based orders vs. direct sales)
Refine your marketing (Focus on top-performing channels)
Cultivate customer relationships (User data is golden)
Over time, you’ll be able to optimize your approach for sustainable growth and increased profitability—without being at the mercy of third-party delivery platforms.
Our combined expertise in restaurant consulting and marketing can help you craft a data-driven strategy that balances the convenience of delivery apps with the advantages of in-house marketing. Reach out for guidance on honing your P&L, setting up effective campaigns, and building a lasting brand presence in your community.
A serial entrepreneur with over a decade of experience in business consulting, marketing, and technology solutions. Darshan's consulting firm, Debox has been helping restaurants in the USA drive profitable growth through differential marketing and has created a niche in marketing restaurants since 2016.
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