Recent articles in respected business publications reveal that restaurants are seriously questioning the business sense of portal sites that offer online ordering. An article in Bloomberg BusinessWeek relates how Pedro Munoz, owner of Luz, a Latin American restaurant in Brooklyn, NY, has decided to drop his portal service with Seamless.
The good news is that Munoz has been sending out information with his takeout and delivery orders, directing customers to use his custom online ordering site – powered by NetWaiter.
In the articles, Munoz cites the factors that make portals an untenable situation for his restaurant, and others:
High fees. Munoz paid Seamless a 14% commission on all orders, plus additional charges for advertising and credit-card transactions. Considering that some restaurants don’t realize a high profit margin on some dishes, this doesn’t leave much profit.
Turnaround time for payment. Munoz and other restaurant owners had to wait up to 30 days for payments that were processed through Seamless to reach his account. He says that Seamless was holding as much as $20,000 at some points.
Similar complaints have been made by other restaurants against other online portals. “It’s awesome if you’re a customer. It’s great,” Munoz told Bloomberg. “But in all aspects, it’s killing the restaurants. It’s a model that cannot be sustained.”