First-party vs third-party online ordering

First-party online ordering means customers order from your own website or app. Third-party online ordering means they order through a marketplace app such as DoorDash, Uber Eats or Grubhub. Third-party apps bring reach and drivers, and charge a commission on each order. First-party ordering costs less per order and lets you see who your customers are, but you have to bring the traffic yourself.

For most stores the answer is not one or the other. Use marketplaces to be found by people who have never ordered from you. Use your own ordering for the customers who come back. The work is moving repeat customers from the first channel to the second.

What is first-party vs third-party online ordering?

The difference is who owns the order.

• Third-party, or marketplace, ordering. The customer opens a delivery app, finds you among many restaurants and orders. The app takes payment, usually sends a driver and pays you the order total minus its fees. The app owns the customer relationship.
• First-party, or direct, ordering. The customer orders on your website or app, built on an ordering system such as the one in Square or Toast or a dedicated ordering provider. You take payment, set the menu and prices, and see the order history.

Many franchise brands run one approved first-party system for every store. If you are a franchisee, check your franchise agreement and brand standards before adding or changing any channel.

What third-party ordering does well

Marketplaces are good at things that are hard for a single store to do.

• Reach. Plenty of people open these apps when they are hungry and have not picked a restaurant yet. A store with a strong rating and good photos gets found by people who would never type its name.
• Drivers. You do not hire, schedule or insure delivery drivers.
• Low setup. You can be live quickly, with menus, payments and support already built.
• Promotion tools. Marketplaces sell placement and offers inside the app, if you choose to pay for them.

The cost is the commission. Marketplace commissions are a percentage of each order, and they commonly fall somewhere between about 15% and 30% of the subtotal for delivery, depending on the plan. Pickup orders on the app usually cost less. Higher tiers usually include more delivery coverage or placement. Rates and terms change, so check the exact rate and fees in your own contract rather than relying on a number you read somewhere.

What first-party ordering does well

Your own ordering is good at different things.

• Lower cost per order. There is usually no percentage commission, though you pay for software and card processing.
• The customer. You see who ordered, how often and what they bought, so you can ask them back.
• Control. You set the menu, photos, add-on prompts and prices on your own terms.
• Pickup. Pickup orders on your own site are often the cheapest online order you can take.

The catch is traffic. Nobody stumbles onto a single store's website the way they browse a marketplace. You have to send people there: your Google listing, receipts, bag inserts, signs at the counter and your local marketing.

Is commission-free ordering really free?

"Commission-free" usually means no percentage of each sale. You still pay a monthly fee, a flat fee per order, or both, plus card processing. If you offer delivery, you pay your own drivers or a delivery service. Many marketplaces also sell delivery-only service for orders placed on your own site, usually as a flat fee per delivery. Add it all up per order before you compare.

What each online order really costs

Compare the same order on both channels. Use your own contract rate and fees. The numbers below are for illustration only.

The direct pickup order keeps $5.66 more. If Greeley moved 120 of its 600 monthly marketplace orders to pickup on its own site, that is about $679 a month, or roughly $8,150 a year, from the same customers eating the same food.

Our guide on making third-party delivery profitable covers the marketplace side in more depth, including menu pricing and packaging.

DoorDash vs your own website: which orders are new?

The cost per order is only half the question. The other half is whether the order would have happened anyway.

• A marketplace order from someone who had never heard of you is a new customer. Even at a high commission, it is sales you did not have.
• A marketplace order from a regular who used to walk in or order on your site is the same customer at a higher cost.

You can get a rough read from your own data. Look at how many marketplace orders come from repeat customers if the platform shows it. Watch whether your in-store and direct orders fall when marketplace orders rise. If they move together in opposite directions, some marketplace orders are moved orders, not new ones. That matters for same-store sales growth, because moved orders add commission without adding customers.

How to move repeat customers to first-party ordering

The aim is not to push customers away from the app. It is to make your own ordering the easier choice next time.

1. Put your ordering link at the top of your Google Business Profile, with photos that match the menu.
2. Make pickup on your own site fast. Order ready by a quoted time, on a clear shelf near the door.
3. Use add-on prompts on your own site, the same way you would at the counter. See how to increase average check.
4. Print your ordering link or QR code on receipts and counter signs.
5. Use bag inserts on direct and in-store orders. Check your marketplace agreement and brand rules before adding anything to marketplace bags.
6. Track direct orders as a share of all online orders each week. That share is your scorecard.

Common mistakes with online ordering channels

• Comparing gross sales instead of what is left after fees. A busy marketplace month can leave less than a quieter direct month.
• Assuming "commission-free" means free. Add software, processing and delivery per order.
• Letting the marketplace menu drift from the in-store menu. Missing items and old photos cost orders.
• Ignoring ratings on the apps. Customers on marketplaces read them first, the same as on Google. See how to improve your restaurant's online reviews.
• Leaving marketplaces entirely and losing the new customers they bring.
• Never checking the contract. Plans and fees change, and the plan you signed two years ago may no longer fit.

A weekly online ordering check

Once a week, whoever runs the store pulls four numbers by channel: orders, net sales, average ticket and what was left after fees. Watch the direct share of online orders. If it rises, the work is paying off. If marketplace orders rise while in-store and direct orders fall, look harder at which orders are new.

AI COO reads each store's POS, compares the store with its own recent weeks and with the middle store in its brand, and sends the owner one specific lever when something moves. You can see how Franlever works.

General information for restaurant and franchise operators, not legal, tax, accounting or financial advice. Figures in examples are illustrations, not predictions or promises of results. Laws and platform policies change and differ by location, so check the current rules and talk to a qualified advisor about your situation.