Just-Eat Business Model

[LeasingEval]

Does anyone know how the just-eat (or uber-eats for that matter) business model works?
Does it cost the vendor anything at all to be on the platofrm? Or are all the fees paid by the customer?

 

[Mark T Jones]

My understanding is that there is a fixed set-up fee and a % transaction fee (the latter being pretty high!)

 

[DontAsk]

Vendor pays. Often you can negotiate a discount if you pick up in person and save them the fee.

 

[AlanJ1]

As Mark said, it will cost X£ (It varies depending on who you are and who else is in the location) as well as a % of your turnover. Just eat I believe are the cheapest of the three majors.

 

[LeasingEval]

So is there still value to a takeaway shop in having their own platform for online orders that they own outright, or pay a modest annual charge for?

 

[UrbanRetail]

So is there still value to a takeaway shop in having their own platform for online orders that they own outright, or pay a modest annual charge for?

Absolutely. As far as I'm aware, Uber Eats, Just Eat and Deliveroo are all loss making.

Charging restaurants ridiculously high percentages (as high as 35% in Deliveroos case) is not sustainable for most food businesses.

I did read about an interesting experiment in Belgium, where customers could message an automated WhatsApp number, to place their order and pay via a link sent back using a mobile payment app.

The future of this industry is interesting for sure, but I don't believe the big names have it sown up, far from it.

 

[Mark T Jones]

Many are looking at doing so

You really need to research shopping habits, specifically what portion of potential customers use Just Eat as their primary search tool and how many arrive there after finding their restaurant of choice

Personally, when ordering from home I go directly to my restaurant of choice - if I'm away I may rely on just eat

 

[bodgitt&scarperLTD]

We alway go direct to our local takeaways, but it helps that they have excellent websites.

 

[Ryan Paul]

My understanding is that there is a fixed set-up fee and a % transaction fee (the latter being pretty high!)

This is correct. The larger chains like McDonalds, Greggs, etc... will have much lower rates.

By being on the website the restaurant gets A) Exposure and B) Drivers.
The latter being the most important. Often takeaway restaurants struggle to retain delivery drivers. If a takeaway restaurant has a god rep, steady midweek and busy weekends then it can sustain itself however others need the 3rd party platform.

 

[BusterBloodvessel]

Just Eat fees come to around 20-25%, I believe it is 14% plus VAT plus a couple of small service charges. Around £500 to join the platform.

UberEats 30% of all charges with £500 sign up fee (paid in instalments and often promotion periods to join with no fee) - the difference being that they provide delivery drivers whereas Just Eat do not (I think possibly they are starting to now in some areas).

I've seen so many attempts at local platforms - either "OrderManchester", "OrderBirmingham" or whatever type affairs for restaurants in one town, as well as independent apps/websites for restaurants to licence and brand up as their own. I haven't seen one make any headway into the market at all yet, nor have I seen any restaurant/takeaway successfull come OFF just eat!

At the end of the day, if you know exactly what takeaway you want you might call or order directly - if you "just fancy a pizza" or "just fancy a kebab" then those three have it sewn up, Just flick open the app and browse. I'm not going to start browsing google reviews instead then looking at individual menus and apps for each one, nor am I going to find them on Just Eat then go out of my way to order from their own platform instead.

So is there still value to a takeaway shop in having their own platform for online orders that they own outright, or pay a modest annual charge for?

There is value to the takeaway, yes. No value to the customer - and that's the problem. Except, perhaps, "order using our own app and save 10%" or whatever which I've seen people try. Still relies on them bothering to download that extra app, then remember they even have it.

 

[Paul Norman]

These players charge a substantial fee for their services.

The challenge is that the customer doesn't really care about that. The end supplier ends up making two tenths of a bowl of nothing. But the customer doesn't really care about that. So long as they have a user friendly website, and don't have to move from the sofa, and their bag of processed obesity fuel arrives hot, they are happy.

But I still reckon, on small volumes and higher margins, there is a slot in the market for getting a local reputation, having a decent website, and getting at least some of the business.

 

[LeasingEval]

OK, so I am a couple of weeks away from completing the MVP of a online ordering system tailored for takeaway food shops. It has a mobile friendly basic website site to select from the vendors menu and then make payment. And for the shop there is a back- end dashboard which will show incoming orders and track the through the states of new, in progress and completed with updates to the customer as it changes state.

My question is how to market it to potential customers- other than contacting local shops in person.

I wonder where takeaway owners hang out online? Are there forums, Facebook groups etc where they discuss issues or buy/sell equipment?

My system is quite basic, so I will be competing on commercial terms and not technology so it should be quite appealing to new businesses and those who have been reluctant to embrace just-eat etc

 

[Mark T Jones]

You have just missed the exhibition season, but next year ghfy could provide a decent platform for you.

I have a lot of customers in this area - nearly all use multi platforms (grudgingly) mostly because they fear losing business If they don't.

I suspect you sell need to revolve around orders and delivery more than tech

 

[LeasingEval]

Thanks for the info. The largest remaining piece of work is payment integration. I have never added this to a site before.

I think for each customer I need to find out which card processing system they use and the obtain the developer API documentation for their online payments service and integrate that with the platform?

Anyone know if that is correct?

 

[BusterBloodvessel]

You don’t need to sell it to businesses on how much they can save, you need to sell it on how many orders you can get them. And quite honestly, unless your marketing budget is absolutely huge, it isn’t going to be enough.
We are with Ubereats and after a standing start with deliberately no promotion from ourselves whatsoever we took around £300 in our first week, 4 weeks later we have just taken £750 this week. Yes the commission is insanely high but even after that it’s still £550 in additional business this week with absolutely 0 work from ourselves. Convincing consumers to move away from the platforms they know, and use when they just want some food but don’t know where from until they log on and browse, to downloading a dedicated app for each and every takeaway is a huge uphill challenge that I’ve yet to see anybody manage - and unfortunately you’re by far from the first to develop a platform like the one you have.
Sorry to be negative but I think you will find it a struggle. Solutions such as yours have been around for years but yet Ubereats/Deliveroo/just eat still dominate.

 

[LeasingEval]

Ah, so perhaps the title of the post is a bit misleading as I'm not looking to create a platform like just-eat. Mine is a white-label platform the will present with each individual vendors branding, contact details and menu.

It is to allow those that don't want to be on just-eat etc to he able to take online orders and fulfill them themselves.

It can also be used for contact less ordering in sit-in premises.

 

[LeasingEval]

Oh, and the cost for using my platform would be a fixed monthly fee - perhaps with tiered levels based on the volume of orders - perhaps even a free tier so that there is no cost to get started

 

[BusterBloodvessel]

Yes - but the type of platform you have developed already exists. OrderYoyo is one example, Food-Now is another. Honestly I would stop and think about whether you need to develop this - what are you offering that the above two companies, as just two examples, aren't?

The issue still remains that you aren't really solving any problems for the consumer, and they are the ones that will decide which app they use.