Ever since the ECQ was implemented in the Philippines, businesses opted for online food delivery platforms as a “quick solution” to serve their customers during lockdown.
With 24-hour takeout and food delivery services now allowed in Metro Manila, it’s a no-brainer to consider providing online ordering and automated deliveries…
But as a business, you need to think of your options between having an online store versus an online food delivery platform (example: foodpanda, GrabFood, etc.) to grow your business.
Let’s take a look at these reasons why you should choose an online store builder like Prosperna over online food delivery platforms:
1. IT’S A MARKETPLACE, NOT A WEBSITE BUILDER – doh!
These apps may be popular during quarantine, but at the end of the day, they are listing platforms NOT website builders.
They work as an online marketplace, who’s goal is to provide consumers with the BEST CHOICE for the LOWEST PRICE. SO by nature, it’s jam-packed with other businesses and your competitors in the food and beverage industry.
Delivery service providers are definitely flourishing together with eCommerce, so why not get your own online store with its very own order fulfillment system?
Having both would actually be our suggestion (read on and you’ll know why).
In case you’re wondering about cost, in our previous blogs we gave a fully detailed cost comparison between Shopify, WooCommerce and Prosperna. And in it, you’ll quickly figure out, what will fit an SME-friendly budget.
Not to toot our own horn, but besides the difference of the total-cost-of-ownership, we recommend Prosperna, because we understand that as an SME, you want to focus on YOUR sales and prioritize YOUR customers with YOUR own brand.
Our Online Store Builder can get you up and running in less than 2 minutes for as low as USD 25 (PHP 1,260) per month.
2. OWNING AN ONLINE STORE GIVES YOU MORE ACCESS & CONTROL
Online food delivery platforms allow you to create a profile and accept orders, but you have minimal control over marketing, inventory and operations.
They do provide good marketin exposure but in exchange, they put a BIG barrier between you and your customers.
An online marketplace as a sales channel will be limited to whatever traffic the platform has at that existing moment, within a limited distance around your location. Plus, there are no options to add technical features you need to market, sell and stay competitive online.
Moreover, and this is a BIG one.
You don’t have access to complete customer information, because all you do is provide the products for them to market and for them to delive, so it’s difficult to gain data you need for future marketing and sales campaigns.
Your own online store records the relevant customer information that you can use to determine their demographics, develop buyer personas and improve overall marketing and sales performance.
3. MARKETPLACES MAKE IT HARD TO STAND OUT
Every seller in a marketplace is either treated too equally, or places small sellers at a great disadvantage against bigger brands selling on food delivery platforms.
These giants have a higher advertising budget they need to stand out, while establishing your brand can be difficult because your profile has little to no personalization features.
Sellers who sell the same product may appeal to other customers better, so these delivery platforms will prioritize their products in the listing page.
SEO (aka. Search Engine Optimization) won’t help much with standing out, since most of these platforms are product-focused, not seller (or brand) focused.
The best you can do is upload a logo, your menu and pricing, but the rest is up to how much you’re willing to invest in online advertising.
With a Prosperna Store, you can feature your products and add every SEO description to rank up your brand on search engines, without spending extra. You can even implement advertisements directly via Google, YouTube, Facebook, Instagram and more, to get immediate increases in revenue.
4. YOU WANT CUSTOMERS TO KNOW AND TRUST YOU!
A major disadvantage of these delivery platforms is that they mediate your customer transactions for you, so you have no customer engagement whatsoever.
You and other sellers share the customer base. You lose the opportunity to upsell your products at various stages.
Since customers are using their platforms to order from you, the trust is built between the delivery service marketplace platform and your customers.
Worst case scenario, the online food delivery platforms horde the customer loyalty for themselves, and “your buyers are their customers.” (Let that sink in for a moment.)
For the cost of their high commssion rates, you’re basically working for them (versus the other way around).
Think about it.
Customers that purchase directly from your online store are all YOURS, free from competition, and are dedicated to fully-engage with you because all transactions are done directly.
5. THEY PUT THE BUYERS FIRST OVER THE SELLERS
During MECQ, only 50% of riders are allowed to go out and make deliveries, and every rider can only do so much in a day.
The competition that exists in these online food delivery platforms already keep you from having customers to yourself, but what’s even more problematic is that these platforms won’t prioritize your orders the same way you would do if you had your own online store.
Technically, sellers are the customers of these online food delivery platforms because it’s the businesses that acquire their services to sell on their delivery channels, but their mindset is focused on the end-users i.e. the consumers making a purchase using their platforms.
Also, food delivery riders are often given the option to choose the orders they want to deliver, so even your location becomes a deciding factor whether you’ll be able to make a sale or not.
Plus, what happens if the delivery service marketplace platform delivers your food late or the food quality becomes in question?
Some customers may think it’s YOUR business that has poor customer service just because the delivery was executed poorly, which puts your business at risk and at a disadvantage.
It’s better to fulfill orders on your own online store because you can partner up with dedicated delivery service providers that will prioritize your needs as a seller.
6. COMMISSION PER SALE & TRANSACTION FEES
One of the major reasons why these platforms don’t allow direct communication between buyers and sellers is because THERE IS AN OPTION to sell to customers directly and bypass having to pay commission per sale. This should be how it is with your own online store, where you’re not obligated to pay transaction fees to your payment processors and delivery providers for every sale that you make.
More often, they have their own policies on returns and refunds that may be in conflict with your own policy as a brand. So despite greater sales, your profit margin ends up being low and your pay-out duration could be delayed because the platforms hold your money until the product reaches your customer.
That’s why it’s also important to choose the best online store builder that lets you keep ALL THE PROFITS to yourself and follows your brand policies.
7. ONLINE FOOD DELIVERY PLATFORMS ARE AN “ADDED” SALES CHANNEL
To be 300% clear, we’re not AT ALL criticizing sellers that use delivery service marketplace platforms. In fact, we believe in having a wide multi-channel online presence.
We think these platforms are doing well in providing some form of visibility, especially for NEW CUSTOMER ACQUISITION. However, it can be difficult to stand out because of their limited features, and making a profit as an SME is much harder because you have to pay high commission fees.
So what we want to promote is the importance of having your own online store as a main sales channel, together with different platforms like delivery service marketplaces, social media accounts, etc. as your extended channels for marketing and sales.
CONCLUSION
At Prosperna, we’re on a mission to empower 100,000 SMEs in the Philippines with the easiest technology that’s helps them acquire and retain customers.
These 7 reasons we shared should serve as a guide in helping you make your next business decision.
In summary, we discussed:
- DELIVERY PLATFORMS ARE MARKETPLACES, NOT WEBSITE BUILDERS
- OWNING AN ONLINE STORE GIVES YOU MORE ACCESS & CONTROL
- MARKETPLACES MAKE IT HARD TO STAND OUT
- YOU WANT CUSTOMERS TO KNOW AND TRUST YOU
- THEY PUT THE BUYERS FIRST OVER THE SELLERS
- COMMISSION PER SALE & TRANSACTION FEES
- ONLINE FOOD DELIVERY PLATFORMS ARE AN “ADDED” SALES CHANNEL
Create your free-forever Prosperna account now.
