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High Commission Fees in the Ghost/Virtual Kitchen Industry

One of the biggest pain points faced by ghost or virtual kitchens is the high commission fees charged by marketplace apps and third-party delivery platforms. These fees can eat into profit margins and make it difficult for virtual kitchens to operate profitably. Many platforms charge between 20% to 35% of the order value, which can significantly reduce the potential for revenue growth.

Here are the main issues caused by high commission fees:

1. Reduced Profit Margins

High commission fees take a large portion of the revenue, reducing the overall profitability for virtual kitchens. With lower margins, there's less flexibility to invest in quality ingredients, staff, or marketing.

How Plat360form Helps:

Plat360form offers an integrated marketplace app with direct-to-consumer ordering that helps virtual kitchens reduce reliance on third-party delivery apps. By managing orders and customer interactions directly through Plat360form’s app, you can eliminate or reduce commission fees, thus improving your profit margins.

2. Limited Control Over Customer Relationships

Third-party apps often own the customer data and have control over customer relationships. This means that ghost kitchens can't build their own brand loyalty or personalised experiences, as the platform typically owns the customer relationship.

How Plat360form Helps:

With Plat360form's custom-branded marketplace app, you have direct access to your customer data, enabling you to engage with your customers, build loyalty, and run targeted promotions. You can send personalised offers, loyalty rewards, and communicate directly with customers without intermediary platforms taking a cut.

3. Inconsistent Revenue Streams

Relying on third-party delivery platforms can result in unpredictable revenue. The apps can change commission structures or introduce additional fees, leading to fluctuating costs for virtual kitchens.

How Plat360form Helps:

By using Plat360form’s integrated online ordering and payment systems, you create a stable and predictable revenue stream. With fixed pricing models for using the platform, you can plan your costs more effectively and avoid sudden changes that are common with third-party apps.

4. Increased Competition

Marketplace apps often list multiple businesses in the same category, making it harder for individual ghost kitchens to stand out. Competing with other businesses on these platforms can be difficult, especially when high commission fees limit your ability to spend on marketing.

How Plat360form Helps:

Plat360form helps you create a unique digital presence for your ghost kitchen through your own branded website and app. By reducing your reliance on third-party apps, you can control your marketing and drive traffic directly to your business. Plat360form’s digital advertising tools also allow you to run targeted campaigns, driving customer engagement and increasing visibility without paying high commissions to third-party platforms.

5. Lack of Customisation and Control

Third-party delivery apps often limit your ability to customise menus, pricing, and the overall user experience. These platforms can impose restrictions that do not align with your business goals or brand identity.

How Plat360form Helps:

Plat360form’s customisable platform allows you to tailor your menu, pricing, and digital experience to suit your business needs. You have full control over your branding, making it easier to stand out from competitors and provide a personalised customer experience.

6. Hidden Fees and Costs

Many third-party delivery platforms charge hidden fees, such as setup fees, delivery fees, and promotional fees, which can make it difficult to predict and control costs.

How Plat360form Helps:

Plat360form offers transparent pricing, with no hidden fees. You only pay for the services you use, and the platform provides full visibility into your costs, making it easier to manage your budget and avoid unexpected charges.

7. Dependence on Third-Party Platforms

Being reliant on third-party apps for orders and delivery can create long-term risks for ghost kitchens. If a platform experiences technical issues or changes its business model, your revenue can be impacted.

How Plat360form Helps:

Plat360form's unified platform reduces your dependency on third-party platforms by providing an all-in-one solution for online ordering, delivery management, and marketing. With direct control over your operations, you're less vulnerable to the risks of relying on external services.

Strategies to Overcome High Commission Fees

  1. Shift to Direct-to-Consumer Ordering: By moving your ordering system to your own platform (like Plat360form), you can bypass third-party apps and keep more of your revenue.

  2. Offer Subscription Models: Consider offering loyalty programmes or subscription-based models through your own app. This encourages customers to order directly from you, reducing reliance on third-party apps.

  3. Negotiate Better Terms: If you must use third-party platforms, negotiate better commission rates, especially if you have a high order volume. Some platforms may be open to lowering fees in exchange for exclusivity or high sales figures.

  4. Focus on Branding and Marketing: Invest in building your own brand through targeted marketing, SEO, and social media, which can help drive traffic to your direct ordering channels rather than third-party platforms.

  5. Streamline Operations: Use technology, like Plat360form, to streamline your order management, reduce overhead costs, and improve operational efficiency. This will offset the impact of high commission fees by lowering your operational costs.

Key Takeaways

  • High commission fees from marketplace apps can significantly cut into your profit margins and limit your ability to build customer relationships.

  • Plat360form offers a cost-effective solution for ghost kitchens by enabling direct ordering and customer engagement, which helps eliminate or reduce commission fees.

  • With increased control over your business operations, transparent pricing, and customisable branding, Plat360form empowers ghost kitchens to operate more profitably and independently.

Would you like to explore more ways to optimise your ghost kitchen operations and reduce reliance on third-party platforms?

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