How to calculate discounts that profit restaurant

Can discounts profit restaurant?

Ordering food online has become a routine in the current era. While foodies are accustomed to ordering their favorite meals online, another trait that has changed consumer behavior is to seek out “Discounts” and “Offers”. Thanks to food delivery apps like Swiggy and Zomato, for setting up a forever mode of urging restaurants to roll out discounts every now and then to bag more sales where they don’t know how to calculate discounts that profit restaurant. 

However, heavy commissions paired with huge discounts take a big bite from the revenue generated on each online order. Additional marketing expenses like (PPC) pay-per-click or promoted advertisements on food delivery apps also negatively impact a restaurant’s profit margin. Besides this, aggregator platforms create a competitive environment by making restaurants participate in their promotional events. Thereby, making them shell out their profit margins.

While this is a great move to give an immediate boost to sales, deep discounts and other charges have also yielded some bitter results like this.

Let’s face the reality, discounting and deals are the only strategies that guarantee more sales. However, it paints the restaurant’s balance sheet red due to additional expenses. The headstrong consumer behavior of chasing discounts and offers has left restaurants with zero options of offering discounts without hurting big on their profit margins. 

But smart restaurateurs can benefit by choosing the right plans on their own platform ensuring complete freedom on their sales strategy. Here’s a brief guide on how to roll out offers and discounts directly to your customers without compromising on profit margins. 

Make the most on your platform through discounts

Quitting food delivery apps is not the right solution, but you can leverage your discounts directly on your ordering platform. For instance, if you pay 20% of commissions on every order and also extend a discount of 30% on food delivery apps like Swiggy or Zomato. Excluding the taxes and payment gateway charges, you need to compromise on an estimated 50% of the order value. Nevertheless, you can master the art of discounting in favor of your restaurant and your customer, making it a win-win.  

Instead of giving up 50% of your order value, you can split your offer into a 20% discount and 10% cashback (must be credited in your customer’s e-wallet on your ordering app or platform).

Calculate discounts that profit restaurant

The way with which you wouldn’t need to pay heavy commissions or compete with thousands of other brands present on an aggregator platform. his combination of discount and cashback helps in retaining your customer back to your platform without any marketing or additional expenses. Thereby, you spend only 20% on acquiring and retaining new customers as your cashback money remains in your control. On the other hand, your customer can enjoy both discounts and cashback as a double offer.

Add free items

Let’s be honest, price is the main factor for a customer to place an order from a restaurant. Giving away free items to customers, provided with the best price on orders can help you get more direct sales. Hence, you can reduce hefty commissions and promotional expenses.

This strategy can be the best fit if you’re planning to add a new item to your menu. You can give away a small portion new item as a free sample to your customers and get their feedback. While you let your customers enjoy the freebies, you can also make sales analysis about your new item.

Invest in free delivery

Free delivery has been one of the most effective ways to increase sales volume. Customers are concerned about paying delivery charges if the outlet or the restaurant is quite near to their place.

You can invest a small portion of commission in delivery charges and give customers an additional offer from your side. If you have your own delivery fleet, you can also take up the free delivery option for a certain radius (distance/kilometers) and offer free delivery to your nearby loyal customers & also calculate discounts that profit your restaurant. 

Final Words

Be it any aggregator, delivering orders on delivery apps is a good way to get sales and acquire new customers. Nevertheless, you can save more with unique discounts and offers according to your budget on your own ordering platform. Portraying a better value or worth to your customer definitely helps you save more money. Balancing your offers that lets your customers benefit and helps you make more sales with profit is what makes a perfect “Art of discounting”. You can also calculate discounts that profit restaurant through automated system here – https://yumzyx.com/

To know more about starting your own independent platform you can visit  https://blog.yumzyx.com/how-d2c-model-helps-restaurants/

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