The True Cost of Third-Party Delivery Apps

The Math That Doesn't Add Up

Let's start with a simple question: if your restaurant makes $100,000 in delivery app sales this month, how much of that money do you actually keep?

Most restaurant owners would guess somewhere around $70,000-$75,000 after the commission. That seems reasonable, right? The app charges 25-30%, you keep the rest, everyone goes home happy.

Except that's not how it works. Not even close.

By the time you account for commissions, marketing fees, payment processing charges, reduced menu pricing, customer acquisition costs, and the opportunity cost of not owning those customers, you're lucky if you're keeping $50,000. Sometimes less.

That's not a fee. That's a hostage situation.

At PlateForm, we've analyzed hundreds of restaurant financials. We've seen the real numbers, not the marketing pitches. And what we've learned is that the true cost of third-party apps isn't just higher than most owners realize — it's fundamentally unsustainable for all but the highest-margin businesses.

This article breaks down exactly where your money goes, why the math gets worse as you grow, and what restaurants are doing instead.

The Base Commission: Just the Beginning

Let's start with the obvious cost: the commission. Delivery apps typically charge between 15% and 35% per order, depending on the service level and market.

For most restaurants, the standard rate hovers around 25-30%. On a $40 order, that's $10-12 going straight to the platform before you've even thought about food costs, labor, or rent.

Now, third-party apps will tell you this is a marketing expense — they're bringing you customers you wouldn't have otherwise. And initially, that logic makes sense. You're paying for access to a massive customer base and sophisticated technology you couldn't build yourself.

But here's what they don't emphasize: those customers aren't yours. They're the app's customers, and the app charges you rent every single time they order from you. Forever.

Compare that to literally any other marketing channel. If you run a Facebook ad campaign and acquire a customer, you own that relationship. You can email them. You can retarget them. You can invite them to order directly next time. The customer acquisition cost is a one-time expense that creates long-term value.

With third-party apps, you're paying acquisition costs on repeat customers. Someone who's ordered from you fifty times still costs you 30% on order fifty-one. The economics never improve.

Hidden Fees That Add Up Fast

But wait, there's more! The base commission is just the advertised rate. Then come the additional fees that somehow never make it into the pitch deck.

Marketing fees: Want to show up at the top of search results? Want a banner placement? Want to be featured in the app's promotions? That'll be an extra 5-15% of sales, thank you very much. And if you don't pay for marketing within the app, you'll be buried under competitors who do.

Payment processing fees: Even though you're already paying a massive commission, you still pay standard credit card processing fees of 2-3%. Because why not charge you twice for the same transaction?

Delivery fees (sometimes): Some platforms charge restaurants a delivery fee on top of the commission, especially during peak hours or in areas where driver supply is tight. This can add another $2-5 per order.

Customer service fees: If there's a problem with an order — food arrives cold, something is missing, customer just feels like complaining — guess who pays for the refund or discount? You do. The app issues the credit, then deducts it from your payout.

Add all this up, and that 25% commission quickly becomes 35-40% in total platform costs. On a $100,000 month, that's $35,000-$40,000 going to the delivery app before you've paid for a single ingredient.

The Discount Trap

Here's where things get really insidious. To compete on third-party apps, restaurants often feel pressured to offer promotions and discounts. And not small ones — we're talking "20% off your order" or "free delivery" types of offers.

The psychology makes sense. The app is showing your customers twenty other restaurants. Half of them are running promotions. If you're not discounted, you're invisible.

But here's the catch: you're funding those discounts. Sometimes the app kicks in a small subsidy, but most of the financial burden falls on the restaurant. So now you're paying 30% commission and offering 20% off the menu price.

Do the math on that. A $50 order becomes $40 after the discount. Then the app takes 30% of the discounted amount ($12), plus processing fees, plus any other nickel-and-dime charges. You're left with maybe $25-27 from what should have been a $50 sale.

That's a 46-50% effective commission rate once you account for discounting.

And the worst part? You can't stop. The second you turn off the promotions, your order volume drops off a cliff because customers have been trained to only order when there's a deal.

Menu Price Inflation: Passing Costs to Customers

Faced with unsustainable economics, many restaurants try to recover some margin by raising prices on third-party apps. You've seen this — the same burger that costs $12 in the restaurant costs $15 on the app.

This works, kind of. You claw back a bit of margin. But it creates new problems.

First, customers notice. They're not stupid. When they realize they're paying 25% more for delivery app orders, they start questioning whether it's worth it. Some go elsewhere. Some stop ordering delivery altogether.

Second, it damages your brand. Your restaurant becomes associated with high prices and poor value. Customers don't blame the delivery app — they blame you. After all, your name is on the menu, not the app's.

Third, it creates internal confusion. You now have multiple pricing structures to manage — in-house prices, direct online ordering prices, App A prices, App B prices. It's an operational headache that leads to mistakes and frustrated customers.

The fundamental problem remains: you're trying to patch an unsustainable business model with price increases, and it's not working.

The Customer Ownership Problem

Let's talk about the elephant in the room: data.

When someone orders through a delivery app, what do you learn about them? Usually just a first name and what they ordered. That's it.

You don't get their email address. You don't get their phone number. You don't get to see their order history. You don't know if they're a first-time customer or a regular. You can't send them a thank you message, a birthday discount, or a notification about your new menu item.

The delivery app has all of that data. They use it to market to your customer, pushing them toward whatever restaurant is willing to pay the highest commission or run the biggest discount.

Think about what this means for your business. Every dollar you spend on delivery app commissions is subsidizing the platform's efforts to commoditize your restaurant. They're actively working to make you interchangeable with every other option in your category.

Meanwhile, you have no way to build direct relationships, create loyalty programs, or turn one-time customers into regulars. You're a fulfillment center for someone else's customer base.

The Volume Trap: Growing Your Way Into Trouble

Here's a trap we see constantly: restaurants that initially struggled with low delivery volumes, finally started getting traction on the apps, and then realized they'd created a new problem.

When you're doing $10,000/month in delivery app sales, the commission fees sting but they're manageable. You're seeing it as incremental revenue.

When you hit $50,000/month, you're paying $15,000-20,000 in fees. That's real money, but you're busy, so you assume the volume makes up for it.

When you cross $100,000/month, you're writing checks for $30,000-40,000 to the third-party apps. That's more than most restaurants pay in rent. It's probably more than your entire payroll for the month.

And here's the cruel irony: the higher your delivery app volume, the less profitable you become. You're working harder, managing more orders, dealing with more logistics — and actually making less money per order than when you were smaller.

This is the opposite of how sustainable businesses work. Normal businesses achieve economies of scale — unit costs go down as volume increases. With third-party apps, the per-order cost stays fixed (or increases if you need to spend more on in-app marketing to maintain visibility).

You can't grow your way out of this problem. You can only grow deeper into it.

The Real Cost: A Worked Example

Let's put real numbers to this. Consider a restaurant doing $100,000/month in delivery app sales.

Gross Sales: $100,000

Less: Commissions (30%): -$30,000
Less: Additional fees (5%): -$5,000
Less: Discounts and promotions (avg 15%): -$15,000
Less: Payment processing (2.5%): -$2,500

Net Revenue from Platform: $47,500

But wait, we're not done.

Food Costs (30% of net): -$14,250
Labor (30% of net): -$14,250
Packaging (5% of net): -$2,375
Rent allocation (10% of net): -$4,750
Utilities & overhead (8% of net): -$3,800

Net Profit: $8,075

That's an 8% profit margin on $100,000 in gross sales. You worked all month, managed hundreds of orders, dealt with customer complaints and delivery issues, and walked away with $8,075.

If you'd done that same $100,000 in direct sales (no commissions, minimal discounts, full customer data ownership), your profit would be closer to $25,000-30,000. That's a 3-4x difference in profitability for the exact same sales volume.

When Delivery Apps Make Sense (And When They Don't)

To be fair, third-party apps aren't universally bad. There are scenarios where they make strategic sense:

They work if:

• You're just starting out and need immediate visibility
• You have extremely high margins (think bubble tea, smoothies, pizza)
• You're using them purely for discovery and actively converting customers to direct ordering
• You're in a market where direct ordering infrastructure doesn't exist
• You view them as paid advertising with a clear conversion strategy

They don't work if:

• They're your primary sales channel (too risky, too expensive)
• Your margins are already thin (most full-service restaurants)
• You have no strategy to move customers to direct ordering
• You're discounting heavily just to compete
• You're losing money on each order but hoping to "make it up in volume"

The key is intentionality. If you're on third-party apps, you should know exactly why, and you should have a plan for either improving the economics or migrating customers elsewhere.

The Alternative: Owning Your Channel

So what do successful restaurants do instead?

They treat third-party apps like an expensive marketing channel, not a long-term business model. They use apps to get discovered, then aggressively funnel customers toward direct ordering where the economics actually work.

Here's what that looks like in practice:

Include marketing materials in every delivery app order — QR codes, discount codes for direct orders, info cards about your loyalty program. You paid $12 in commissions for this order; spend another $0.50 on a flyer that converts them to a direct customer.

Build your own ordering infrastructure. Platforms like PlateForm make this dead simple — you can launch commission-free ordering in less than a day. Once it's live, every customer you convert from an app to direct ordering saves you 30%+ on every future order.

Offer better deals for direct orders. Free delivery on your website. Exclusive menu items. Loyalty points. Make it financially advantageous for customers to skip the app.

Track your customer acquisition cost and lifetime value. If you're spending $10 in commissions to acquire a customer but they only order once and never return, that's a bad investment. If they become a regular direct customer, suddenly the initial cost makes sense.

Your Next Move

If you're reading this and starting to feel a bit sick about how much you're paying to third-party apps, good. That discomfort is the first step toward doing something different.

You don't have to quit the apps tomorrow. But you do need a plan to reduce your dependence on them. Every month you delay is another month of paying rent on customers who should be yours.

Start small. Set up direct ordering. Add your link to Google. Put QR codes on your receipts. Promote direct orders on social media. Give customers literally any reason to skip the app next time.

Then measure. Track how many orders come direct versus through apps. Watch that ratio shift. Celebrate every customer who migrates. And once you see the economics of direct ordering — 100% of revenue, full customer data, complete control — you'll wonder why you waited so long.

The third-party apps aren't going away. But your dependence on them can.

See PlateForm pricing or talk to our team about your specific situation.