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Definition

Third-party delivery

Third-party delivery is order fulfillment through a marketplace app like DoorDash or Uber Eats that brings you demand in exchange for a commission on each order, typically 15 to 30 percent.

Third-party delivery platforms are the marketplaces (for example DoorDash for Merchants and Uber Eats for Merchants) that list your menu, take the order, dispatch a driver, and hand you a check minus their commission. DoorDash's published plans run 15% / 25% / 30%, and once you add in-app marketing, refunds, and card processing the effective cost of a third-party order lands closer to 30%-40% of revenue. On a 3-5% net margin business, giving up a third of an order's revenue can mean the order is barely profitable or loses money.

The honest read is that marketplaces are a demand channel, not a partner in your business. They are useful for reaching people who would never have found you, filling slow hours, and testing an off-premises menu without building your own First-party ordering stack. But the customer is theirs: marketplace guests attach to your loyalty program at just 3 percent versus 41% vs 3% for direct guests. The winning play for most independents is to use third-party for discovery, then convert those guests to direct ordering where you keep the data and the margin. See online ordering.

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Third-party delivery (definition) | TableMagic