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DoorDash Merchant: What It Costs And How It Works

Last updated: July 19, 2021
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a DoorDash merchant standing outside his store while DoorDash delivery drivers come and go

The demand for contactless food ordering and delivery continues to rise as more people make use of apps like DoorDash to enjoy quick meals.

Online ordering and delivery have made a brand new market for both the consumer and restaurant business as it switched from a luxury to a necessity during Covid-19.

Restaurants can become merchants of different levels with DoorDash and offer individual commission rates and guaranteed deliveries.

DoorDash has taken full advantage and gives extensive marketing and exposure to their partnered merchants, especially small and local businesses looking to expand their reach and improve customer experience.

If you’re a restaurant owner looking to boost sales by offering DoorDash, we have all the information you need right here to judge if it’s the right decision for you.

How does DoorDash Work for Restaurants?

You’ve probably come to this article to see if becoming a DoorDash Merchant is worth it for your business.

Often, we only think of big chain corporations being linked to popular and fast-paced delivery services.

After some recent changes from DoorDash, they have made it far more accessible for small and local restaurants to choose precisely how involved they want to be with DoorDash and its benefits.

There are multiple choices and ways to choose what works best for you and your business.

1. Storefront

If your restaurant has already been implementing delivery orders from their online website, DoorDash has an option to create a website that enables pick up and delivery through their brand.

There is no commission fee.

Storefront lets customers who were already viewing the website use DoorDash’s system to order directly from your restaurant.

Merchants can choose to cancel their Storefront capabilities whenever they wish, with no costs attached.

2. DoorDash Drive

DoorDash Drive is where a merchant uses their website and phone to receive orders, but they use a Dasher to handle the food delivery.

You are in charge of taking orders and getting them ready, but the Dashers and DoorDash are there to make sure the food is delivered.

3. Marketplace

The marketplace is the all-in-one stop for making your business a thriving takeout destination.

Marketplace powers the whole marketing, ordering, and delivering process.

Restaurants have exposure through their close work with the app, and they pay monthly fees for the technology to keep it going.

There is a commission fee on every order, but those are adjustable to your restaurant’s specific needs.

Why Partner with DoorDash?

doordash merchant screenshot

Marketing

Word of mouth tends to be the way local restaurants are advertised.

Visible signs and a good location can let people discover and enjoy your restaurant.

This method has worked for a long time, but in the era of Covid and the realization we don’t have to go out, there are other methods.

DoorDash gives your restaurant exposure through the app that can’t be found elsewhere.

When a customer opens up the app, your restaurant could be front and center on the very first screen they see.

Coupled with different deals and first-time ordering promotions, your restaurant now has new customers ordering from all over.

Through the Merchant Portal, you have access to marketing tools where all the information relating to your DoorDash partnership plans and insights on your business.

Delivery Services

Usually, only a select few restaurants offer their own delivery services.

Hiring their own drivers, potential vehicle and health insurance, and the hourly rate of paying someone all stack up quickly and act as roadblocks for many small businesses to have delivery be an option.

As a merchant with DoorDash, you can select a benefit where you don’t have to worry about any of that.

The Dashers will handle all the picking up and transporting of the food.

Doordash is responsible for their own delivery drivers, not you, the DoorDash merchant.

This is covered with commission fees from each order.

So you can focus on making great food and taking care of your in-house staff.

Self-Delivery

Alternatively, if you would like to avoid commission fees, you can utilize the DoorDash app for onboarding new customers but fulfill these orders with your own staff.

This allows you to keep your delivery team and order protocol intact instead of using the Dashers.

If you have a system in place within your restaurant for deliveries, DoorDash can still give you exposure while keeping your staff employed with their current delivery duties.

This can help normalcy within the team while integrating new technology.

Forming your own delivery crew can have a lot of learning curves.

If you are up for hashing out the details and staying in control, there are options for you to do so while still taking advantage of the income DoorDash provides.

Online Ordering

The DoorDash merchant program has the option for your restaurant to receive online orders through virtual systems.

This cuts out the need to have someone answering a phone or keeping in contact with the customer.

The specific ordering system lets customers order precisely what they want and gives your staff an easy way to review the order as they prepare it.

This is especially useful if your restaurant has never done takeout operations or upkeep.

It is a monthly fee for the online ordering capabilities, but it allows DoorDash to be more integrated into your business model through POS.

Pickup

Online ordering opens up the avenue of pickup.

There is no delivery fee, and a customer can come right to your store for quick pick up after ordering through the app or online.

Overall, pickup options through DoorDash have a much lower commission fee than a delivery would.

Customer Service

DoorDash is a massive, nationwide company.

The support you’ll receive from the brand is top-notch.

They have loads of information online and transparency that lets you know exactly what you’re able to accomplish with them.

DoorDash merchant customer support is available 24/7, and the online portals make it easy for you to troubleshoot if there are any technical or financial issues.

You don’t have the headache of dealing with a majority of issues that could arise.

Pros of Becoming a DoorDash Merchant

At a glance, here are the pros of integrating DoorDash into your business.

  • Extensive marketing and promotional opportunities through the app
  • Multiple options for delivery, pickup, and self-delivery that works with your personalized needs
  • DoorDash Merchant Portal gives access to customer service to handle issues.
  • Increases sales by promotions.
  • Set commission prices and fees
  • Weekly payouts

Cons of Becoming a DoorDash Merchant

These are some concerns one might have with integrating DoorDash into their business.

  • Different state regulations of commission caps for restaurants
  • Takes some control from the owner in a marketing and order sense
  • Can rely on third-party delivery for service

DoorDash Cost for Restaurants

vector graphic showing doordash driver on a bike while wearing a doordash bag on his back - header image for how does doordash work post

When deciding to integrate a new system into a workplace, the biggest question is what the cost-to-earnings ratio will be.

Thankfully, DoorDash has plenty of options for commission fees and deals you can pick and choose from.

Going through the DoorDash Marketplace means the commission fees are based on your restaurant’s needs and pricing.

It is calculated explicitly for what is most beneficial for both parties.

There isn’t a one size fits all commission price for merchants, as every restaurant has different pricing and sales styles.

Fees

Depending on what route you take with DoorDash, there are different pricing options.

These fees and commissions pay for your exposure, customer service, technology costs, credit card processing, and most importantly, it pays the delivery drivers.

DoorDash App

When a customer uses the app to order, a commission will be taken out of the total.

There is no set percentage as each restaurant has different pricing.

Storefront

When Storefront is used, there is a 2.9% processing fee for online credit card usage plus a $.30 flat fee per order.

Drive

Ordering from a restaurant’s website with Drive has a flat rate on each order for the use of Dashers.

How This Impacts Food Pricing

Since commission prices are flexible based on your restaurant’s current pricing, your decision to raise or lower your food prices is solely up to the needs and demands of your business.

By looking at the overall costs of your business, but adding in the increased sales from the marketing DoorDash could give you, you can calculate what your best pricing should be.

How to Sign up for DoorDash as a Restaurant

DoorDash has made it exceptionally easy to sign up and find out which route would be most beneficial.

You can go right to their website here and take a quiz and identify precisely what your needs are.

Is DoorDash Worth it for Restaurants?

Partnering up with DoorDash in any capacity means your product and brand will reach a bigger audience.

Online ordering and delivery have become a staple in America and likely isn’t going anywhere anytime soon.

By having your store’s menu, store hours, and ordering system available on the DoorDash app, your range of customers and orders will likely skyrocket.

It gives local businesses a chance to gain return customers as in-person dining returns to normal.

Many people use the Dashpass, which gets them even better deals on delivery.

Ensuring your restaurant or business is connected to DoorDash’s marketing is a great way to grow your business.

Other food delivery systems such as GrubHub, UberEats, Postmates, and Caviar offer similar but not as extensive benefits as a DoorDash merchant portal and solid customer support.

Frequently Asked Questions

Here are some of the most frequently asked questions when it comes to DoorDash Merchants.

How do merchants pay DoorDash?

Merchants have specified fees and commission payments per order to DoorDash as a user fee.

Once again, there are customizable ways to find the correct pricing for your business.

How do I start a DoorDash business?

If you have a business that offers food or beverage services, it is easy to sign up on the DoorDash Merchant Portal.

Once you do, you’ll have access to all the information needed to make DoorDash a successful aspect of your business.

Do restaurants rate Dashers?

Yes, but they have a separate system through the Merchant Portal rather than an in-app system.

How do I report a merchant on DoorDash?

If you had a poor experience with a merchant, you can contact customer DoorDash support and report the merchant to them.

How do companies like DoorDash get into merchants’ systems for ordering?

Companies like DoorDash work with the leading POS systems that most small businesses use.

For example Square, Toast, Redcat, Chowly, and Shift4.

DoorDash is able to safely integrate and process payments and ordering systems through these technologies.

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