Commission based online ordering systems in Australia such as Menulog, Foodora, EatNow, Uber Eats, Delivery Hero and Deliveroo all charge over 10% commission for every order that goes through their online ordering system.

10% may seem like a small commission to pay, but with the high costs of running a restaurant this commission may actually result in a negative profit margin.

Based on Australian Tax Offices’ industry performance benchmarks for 2013/2014, restaurants expenses range between 85% - 92%, which results in profit margins ranging between 8% - 15%.

Below is a break down of costs of running a restaurant in Australia based on ATO performance benchmarks.

Cost / TurnoverItem
33% - 35% Food and drinks
17% - 32% Labour
7% - 20% Rent

Other costs include equipment rental, stationary and repairs.

If your restaurant is running at a 8% profit margin, paying 10% commission for every online order results in -2% profit margin for online orders.

Below is a profit margin calculation for a restaurant turning over $100,000 in online orders at 10% commission and operating with 92% expenses.

Revenue from online orders $100,000
Expenses for food, drinks, labour, rent, etc ($92,000)
10% commission for online orders ($10,000)
Total Profit ($2000)
Total Profit Margin -2%

In the above example the restaurant is losing $2,000 year from commission based online orders yearly.

With more customers ordering online every year, restaurant’s should look into online ordering systems that won’t cost them a commission for every online order, allowing them to increase profits.