In this digital world, food aggregators like Zomato provide answers to all food-related queries in the shortest span of time. The success of restaurants depends upon the reviews that they get and subsequent revenues that they manage to generate. Hence, all restaurants and food companies are eyeing for a listing on such platforms. However, the question remains, what are the best ways to negotiate terms with Zomato?
Zomato is currently charging the restaurants around 10%-15% based on the service they are providing and the area in which they are operating. This means that if Zomato is the only online platform used by a restaurant, the latter is expected to pay about 7%-8%. On the other hand, if they choose to list themselves on other food aggregator platforms besides Zomato. They will be charged about 12% from Zomato. This commission also varies if Zomato provides its personnel for delivering the products. In such a scenario, there is a possibility of the commission shooting up as high as 18%.
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These terms have come down from the initial 25% which Zomato was charging at the beginning. This happened because restaurants negotiated well with Zomato and lowered the commission. Some of the ways to negotiate are:
How To Negotiate Terms with Zomato
Convince Zomato about their publicity
A restaurant can assure Zomato of enhancing their visibility on their own creatives, hoardings, signboards, billboards or other places they use to publicize about themselves. The idea is that the more they will see the logo of Zomato, the trustworthiness of the platform enhances and stabilizes. At the end of the day, Zomato also needs its publicity.
Also Read: Scaling Up The Outreach Through Zomato
Do not depend exclusively on Zomato
It is advised that restaurants increase their visibility in places other than food aggregators; for example, sponsoring events and hosting events. If they create a space for themselves in various places, their brand value enhances. This will enable them to stay strong on their reputation and be in a better position to negotiate terms with Zomato.
There is nothing better than enhancing the quality of our own organization whereby its name spreads by word of mouth. Any company should constantly strive towards quality and consistency in maintaining this quality. This way, a Zomato might approach that restaurant for having a listing on its platform whereby that restaurant would have an upper hand in negotiating terms with Zomato.
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The food business is indeed challenging as both innovation and quality need to be consistently ensured. No amount of marketing would compensate for word of mouth and customers sharing their positive feedback. This acts as a huge amount of encouragement for others to explore that particular restaurant. If any restaurant succeeds in doing that, all food aggregators would queue for their listings.
Challenges faced by Zomato
In addition to the above points for negotiating, a negotiator should leverage upon areas of deficiencies. For example, for a democratized platform like Zomato, large restaurant owners are unable to leverage their presence and extract distributions and profits. This is primarily because they have to compete with independent restaurants on a hyperlocal basis.
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Platform like Zomato, large restaurant owners are unable to leverage their presence and extract distributions and profits. This is primarily because they have to compete with independent restaurants on a hyperlocal basis.
Moreover, the National Restaurant Association of India (NRAI) started campaigning regarding the discounting prices of restaurant aggregators, their booking and delivery platforms.
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These issues faced by restaurant aggregators like Zomato pose challenges to its functioning and restrict the profit margins of both the aggregators as well as the restaurants.
These shortcomings of Zomato should be leveraged upon. Coupled with the strategies mentioned above, restaurants can look forward to having a strong negotiation with restaurant aggregators.
Also Read: How To Increase Visibility On Zomato?
In today’s food industry, a combination of a lot of factors contributes to its high ratings and positive customer reviews. These include food quality, presentation, innovative cooking, ambiance, service, pricing, accessibility of the location, parking availability; to name a few. Restaurant aggregators also mention the performance of a restaurant on the basis of these parameters. Hence a restaurant should always remember these parameters and use them to their advantage while negotiating. The idea, sometimes, is to balance out on one parameter to compensate for the other. Such a comprehensive approach towards dining goes a long way.
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