As a restaurant owner, you must know the latest trends to reach more customers.
Takeout delivery companies are becoming an important sector of the restaurant industry.
They offer a range of food choices for busy professionals and people who can’t leave their homes.
Postmates for restaurants is among the most popular delivery platforms on the market.
But you may have many questions about using a food delivery app.
For example, how will you get delivery drivers?
Or, will you have enough profit after delivery fees?
Whether you run a tiny taco truck in California, a fancy caviar restaurant in New York, or a deli startup in Los Angeles, you can use Postmates.
Are you ready to join the online ordering world?
We’ll teach you about Postmates so you can determine if this delivery platform is the right fit for you.
Table Of Contents
Overview: How Does Postmates Work for Restaurants?
Postmates is a delivery service app.
Its purpose is to help restaurants access customers who don’t have time to eat at a restaurant in person.
In July 2020, Uber acquired Postmates for $2.65 billion.
The purpose was to help its Uber Eats platform get a larger share of the delivery service industry.
It also needed a hand up against rivals, such as the DoorDash merchant program – a popular delivery platform for restaurants.
By listing your restaurant on Postmates, more people can find it.
You can also opt for in-app Postmates marketing.
The three-step process looks as follows:
- A customer chooses your website on the app and places an order.
- You prepare the meal and package it for takeout.
- A delivery person arrives at your restaurant. Or, you send an employee to take the meal to your customer’s door.
Postmates also allows you to interact with your customers.
You’ll be able to collect data on who your regulars are.
Additionally, you can respond to reviews and even develop a loyalty program.
Pros of Using Postmates for Restaurants
We wouldn’t write an article on Postmates if we didn’t believe in it.
Below are some of the most significant advantages of using Postmates as a restaurant owner.
If you own a small restaurant on a side street, you have an advantage.
Postmates gives you the chance to share the same space as restaurants like McDonald’s.
Furthermore, you can advertise your restaurant on Postmates.
That way, even more customers find you.
Larger Customer Base
The Postmates for restaurants program offers you access to more customers.
In particular, those who otherwise wouldn’t show up at your restaurant’s door.
For example, you’ll be able to serve people who can’t leave their homes.
Or business people who don’t have time to eat lunch in a restaurant.
Boost in Revenue
Visibility and more customers are great.
But, your main goal of working with Postmates is likely to increase your income.
Postmates has a lot of fees.
But if you price your food right and get enough business through the delivery app, you can make money.
Cons of Using Postmates as a Restaurant
Postmates for restaurants has many advantages.
But there are specific concerns that restaurant owners need to be aware of.
So, before you take part in the online delivery market, consider the following.
Postmates doesn’t display its fees on its website.
That’s difficult for restaurants, for it’s difficult to know if the delivery service is a good fit.
Takeout delivery apps like Postmates have high fees.
For example, the DoorDash cost to customers is high, which means that the cost to restaurants often ranges from 15% to 40%.
We’ll talk in more detail next about service fees at Postmates.
But for now, know that Postmates can result in more clients but lower profit margins.
Because of Postmates fees, many restaurants find that they need to compensate.
They often do this by increasing the cost of food on their menus.
Many customers acknowledge that food delivery apps cost more for all parties.
But some people may get turned away if they see huge price jumps on your menu.
In extreme cases, the fees may even cause customers to delete Postmates accounts alltogether.
Service That’s Out of Your Control
When a customer arrives at your restaurant, you’re in control of their experience.
However, by using Postmates, you lose control when your customer’s food leaves your door with a delivery driver.
There could be situations out of your driver’s control that impact your customer’s experience.
For example, if there is traffic, the food may get cold.
In some situations, the driver might have to swerve, spilling the food.
Postmates Cost for Restaurants
Like most assets for businesses, Postmates for restaurants isn’t free.
Unfortunately, Postmates doesn’t make it easy for restaurant owners to determine what their fees are.
Instead, their website encourages you to get in contact with them for details.
Nevertheless, we gathered some numbers about what you can expect from Postmates’ fees.
Fees for Restaurants
Let’s start with the good when it comes to Postmates’ fees.
As a restaurant owner, you’ll receive the following benefits:
- No cost for using their web app
- No cost for their delivery as a Service API
- Postmates won’t charge you until your customer receives their delivery
- You can request a custom flat rate fee with Postmates to see if it’s better for you
Furthermore, you don’t have to worry about managing your customers’ payments.
All payments go through Postmates’ app, and customers can pay via credit card.
Unfortunately, Postmates’ fee system isn’t clear-cut.
On their website, they say that fees come from the pre-tax prices of your food.
They also say they’ll determine your commission rate once you sign up with them.
Nevertheless, you can expect Postmates to charge you a commission fee.
It will range from 15% to 30% of each pre-tax order.
We recommend offering credit cards as a payment option since it’s free with Postmates.
However, you can also add a direct bank deposit, which would cost you an extra 0.8% per transaction up to $5.
Impact on Food Pricing
In April 2020, a pizza restaurant owner posted his March statement from Grubhub.
It showed that he only earned $376.54 of the $1,042.63 that his customers paid due to Grubhub’s fees.
These numbers aren’t for Postmates.
But hefty fees also cut into a restaurant that uses Postmates.
For this reason, you’ll likely need to increase the cost of your food to compensate for Postmates’ fees.
By doing so, regulars might shy away from the sudden price jump.
So, you’ll need to run careful calculations.
That way, you can balance a profit level you’re comfortable with after Postmates’ fees.
By doing so, you won’t price your food so high that it turns customers away.
How to Sign Up for Postmates as a Restaurant
When you arrive at the Postmates website, scroll down to the bottom of the page.
Then click “Add your restaurant.”
The system will then take you to an Uber Eats page.
Although this may be alarming at first, Uber purchased Postmates.
So, they now share the same signup platform.
To get started, you’ll need to fill out the following details about you and your restaurant:
- Restaurant name
- Restaurant address
- Your name
- Email address
- Phone number
- Business type
For the “Business type” section, there’s a dropdown box.
Here, you can select whether you own a restaurant or another business.
From there, you’ll need to upload your restaurant menu.
You’ll also need to describe your restaurant.
The more details you add, the higher the chance that you’ll attract more customers.
Postmates will then provide you with a personal restaurant dashboard.
There, you can manage your profile, orders, and customer reviews.
You’ll also receive valuable software tools, including sales data and customer insights.
Of course, such insights are pointless without customers.
So, you’ll be ready to start accepting your first orders at this point in the signup process.
Is Postmates Worth It for Restaurants?
The more people that have access to purchasing food from your restaurant, the better it is for you.
Wouldn’t you agree?
The increased visibility alone can help your restaurant become a household name.
Furthermore, it could help you gain customers through the Postmates app and in person.
In theory, more orders should translate to more profit.
But because of Postmates’ fees, this isn’t always the case.
You might have to accept a lower profit margin with orders from Postmates.
That way, you can balance profit and reasonable prices.
Frequently Asked Questions
If you still have questions about Postmates for restaurants, rest easy.
We put together some common questions.
That way, you can determine whether Postmates is the right fit for your business.
Do restaurants pay Postmates?
Restaurants pay Postmates via a commission structure.
Postmates doesn’t post their fees, so you’ll need to reach out to them with your business details to know the cost.
Demand for food delivery services like Postmates was high during the pandemic.
As a result, many restaurant owners suffered from increased fees.
They prevented delivery apps from overcharging restaurants.
Which restaurants use Postmates?
Any restaurant can use Postmates proved that it’s in a city where Postmates operates.
Postmates is always working on expanding its operating range.
You can put your address into their online system to find out if your restaurant qualifies.
Is Postmates the best option for restaurants, or should I look at other options too?
Postmates for restaurants is an excellent option, as Uber acquired it in 2020.
Uber works a large part of the delivery service industry.
So, your restaurant has a higher chance of customers finding it.
Nevertheless, you can also consider partnering with other food delivery services.
Examples include Grubhub and DoorDash.
How do restaurants decide which delivery services to partner with?
There are many takeout delivery services on the market that all want your restaurant’s attention.
Examples include Seamless, DoorDash, and Uber Eats.
When choosing which food delivery app to work with, consider how many customers use it.
It would be best if you also looked at conversion rates and the app’s commission fees.
In the past, restaurant owners relied on in-person customers to sustain their business.
But with takeout delivery services like Postmates, you can reach more customers.
Postmates has many benefits for restaurant owners wanting to improve their income.
But unfortunately, they have high fees.
So, you’ll likely need to raise your prices to maintain profit.
Even so, many restaurants enjoy more significant revenue because of Postmates.
What are you waiting for? Give Postmates a try to see if it can help you scale your restaurant business.