Commission Structure of Zomato and Swiggy: Understanding the Fees for Online Delivery Services
As one of the leading food delivery platforms in India, Zomato and Swiggy have a significant impact on the restaurant industry. Understanding the commission structure, additional fees, and overall cost can help restaurants make informed decisions when integrating these services into their operations. This article aims to provide a comprehensive overview of the commission that Zomato and Swiggy charge for online delivery, along with the associated fees.
Overview of Commission Rates
As of my last update in August 2023, Zomato and Swiggy typically charge a commission ranging from 15% to 30% on each order for online delivery services. The exact percentage can vary based on several factors, including the restaurant's partnership agreement, the type of service (delivery vs. pickup), and any promotional deals in place.
For example, a restaurant may experience a lower commission rate of 15% to 18% in cities where these platforms first launch, but the rate may increase to 25% to 30% as the platform expands and more merchants join. Additionally, the commission may differ based on the number of outlets owned by the restaurant chain.
Breakdown of Swiggy's Commission Structure
Swiggy, in particular, charges a tiered commission structure that depends on the gross value of the order. Consider the following example to understand how the commission is calculated:
Example Calculation
Item Price: ?100
GST: 5% Gross Value of the Item: ?105 Swiggy Commission (24%): ?25.20 GST on Commission: ?4.56 Net Value of Item: ?100 Swiggy Commission with all charges: ?35.26Net Amount Paid by the Restaurant: ?135.26
Therefore, the final amount paid by the customer is:
Item: ?100 Swiggy Service Charge (including taxes): ?35.26 GST: ?5 Total: ?140.26For a higher value order of ?1000, the restaurant will pay ?350 to Swiggy and ?5 as GST on the order.
Additional Fees and Charges
In addition to the commission, restaurants may incur other fees for services such as marketing subscription plans or premium features on the platforms. These extra charges can vary and depend on the specific services opted for by the restaurant. It's advisable for restaurants to carefully review their agreements with these platforms to understand the complete fee structure.
Zomato/Swiggy Onboarding Fees
Onboarding and listing fees are another aspect of the service charges for restaurants. Zomato and Swiggy charge an onboarding fee that ranges from ?1000 to ?5000, depending on the number of outlets. This fee covers the cost of setting up the restaurant's profile on the platform.
For orders based on these listing fees, the commission typically works out to between 24% to 30%, including payment gateway charges. Dunzo, another delivery platform, charges an absolute amount depending on the distance of the delivery.
Conclusion
Understanding the commission structure and associated fees is crucial for restaurants considering integrating online delivery services through platforms like Zomato and Swiggy. By carefully reviewing the terms and conditions, restaurants can ensure they are making the most informed decisions for their business.
Keywords: Zomato commission, Swiggy commission, delivery fees for restaurants