Your Food Ordering App is Eating 30% Of Your Food! Rewalty is the Solution.
It’s 7:30 PM on a Friday, and it’s that moment you have been waiting for all week. You open up blah blah app that eats 30–35% merchant commission, and you place an order, and your food magically appears! Congratulations, you are now a part of the blah blah convenience algorithm!
Before I begin with my views, I know! Everyone has views. But hear me out, and I assure you won’t regret it. To make things interesting, let’s start with a quote.
“What is right is often forgotten by what is convenient”.
So that you know, I just googled “Quotes on convenience” before I copy-pasted! Why? Well, it was just convenient!
I don’t blame you! I have done it numerous times and fallen into the trap of relying on convenience without measuring what comes after that! What comes after that? Well, let’s have a look.
For the ease of reading, I have divided this article into three parts: the merchant’s perspective, the customer’s perspective, and the third focuses on the solution. Well, what use is a problem if we don’t solve it!
Let’s take this view from the point of conversation to keep you interested because reading such a long article isn’t convenient. Let’s make it convenient for you! Let’s suppose the restaurant owner’s name is Mr Eat and his imaginary friend is Mr Order!
Mr Order: Hey Eat, how was your weekend, mate? How is the business coming along?
Mr Eat: Yeah! It’s pretty impressive! I got so many orders. During the lockdown, the delivery from the blah blah app was insane!
Mr Order: Wow! Interesting. Just out of curiosity, how much do you sell weekly from the blah blah app, and what are their commissions?
Mr Eat: On a busy week, we do $3000 worth of sales from the blah blah app, and they charge us around 30% commissions. Well, they are getting us sales and profits, aren’t they?
Mr Order: Well, that sounds so cool! But 30% on $3000/week is around $900. So that leaves you with $2100 in your pocket. How about your business expenses? Other marketing expenses?
Mr Eat: Well, I run a Kebab shop. So, let me break it down.
Kebab Price on Blah Blah App is $13, and my original price in the restaurant is $11. Come on, man, I need to cough up some profit and pass the extra $2 as convenience tax to the customer!
(Bread is $ 0.75 + Toppings is $0.50 + Meat/Veggies are $2.50 + Sauce and Packaging are $0.85 + Labour, let say $2 + Overhead is $2) = $8.6 + Blah Blah Commissions are $3.90.
Image credit: Joelle Parenteau
Mr Order: Well, I’m a maths genius so let me see. You make $0.50 in profit. That is 6–7 times lower than what you sold directly? Woooooowwwww!!! How about your marketing cost? Does the POS system cost? Other expenses? If you take that into account, you aren’t making any money?
Mr Eat: Well, we must be making some money, or we wouldn’t be using it! Well, Maybe! Let’s wait until something more attractive comes up!
According to a survey of 15,000 merchants in Australia, the findings are it is impossible to make a profit with such an absurd commission regime. The Restaurants and Catering Association (RCA) has asked the customers to let go of blah blah apps! Well, is that convenient?
What if the commissions are reduced to 10%? Well, in that case, the merchants could make a profit but how will Blah Blah sustain! It will sustain with an ecosystem of a convenient solution for the hospitality industry!
At Rewalty, we aim to bring blockchain to the market for the everyday customer and create an ecosystem whereby the commissions, profitability, and convenience all work in equilibrium to sustain the merchants! Phhheewwww that was a mouthful!
The next article will focus on how we intend to solve this trilemma with a solution at Rewalty!