What marketplace commission really costs a Karachi restaurant (and what 0% commission changes)

Ask a Karachi restaurant owner what Foodpanda costs them and you usually get a shrug and a number that sounds like a tax: "a big cut". It is a large share of every order, and it comes off the top, before you have paid for chicken, gas or the rider. Yet few owners have worked out what that share means in rupees per month, or how much of it they could keep.

This post does that arithmetic. All figures are illustrative; we are not quoting any platform's actual rate, and your own contract will differ. Plug in your numbers at the end.

TL;DR

• Commission is charged on the gross ticket, so a 25-point commission can be most of your profit on that order, not a quarter of it.
• The commission line is not the whole cost: restaurant-funded vouchers, taxes on the commission invoice, and the customer relationship you never get to keep all sit behind it.
• 0% commission ordering does not make selling free. You still pay a subscription, payment processing and delivery. What changes is that the cost stops scaling with every rupee of sales.
• The sensible setup for most restaurants is both: the marketplace for discovery, your own WhatsApp and website channel for repeat orders.

Commission is a share of the ticket, not of the profit

Take a typical order of PKR 1,500. Food cost in a Karachi kitchen runs somewhere around a third of the ticket, call it PKR 525. Packaging, a rider payout or delivery fee, and a share of rent, gas and salaries take another few hundred. On a good day that order leaves you with perhaps PKR 350 to 400 of contribution before any commission.

Now take commission on the gross. At an illustrative 25%, that is PKR 375 on the same order. The marketplace has taken roughly what you were going to keep. At a higher rate the order is loss-making before you have even counted the discount voucher that brought the customer in.

The marketplace earns on revenue; you earn on margin. The gap between the two is where restaurants quietly lose money while "being busy".

A worked example (illustrative)

Assume a single Karachi outlet doing 40 marketplace orders a day at an average ticket of PKR 1,500, 30 days a month. That is PKR 1,800,000 of marketplace sales per month. Here is what the commission line looks like at a range of illustrative rates, and what is left after a 35% food cost:

The rows are illustrative rates, not any platform's price list. Whatever your rate, notice two things. First, the commission is in the hundreds of thousands of rupees a month for a modest single outlet; across three branches it is a manager's salary several times over. Second, the "left after food cost" column still has to cover packaging, rent, staff, gas, electricity and your own drawings. The difference between the 20% row and the 30% row is PKR 180,000 a month that leaves the same kitchen doing the same work.

The costs hiding behind the commission line

The percentage is the visible cost. Four others are easy to miss:

• Restaurant-funded promotions. The "PKR 200 off" voucher that got you the order is often charged back to you, partly or fully. In some contracts the commission is then calculated on the pre-discount price, which compounds the hit.
• Tax on the commission invoice. The marketplace invoices you for its service, and provincial sales tax on services may apply on top. Check your statements; the effective rate is higher than the headline.
• Menu inflation. Many restaurants raise marketplace prices to absorb commission. Customers notice, compare with your counter price, and conclude you are expensive. You end up paying commission and losing trust.
• No customer relationship. You do not get the customer's number, their order history or a way to reach them. The next time they are hungry, the marketplace decides which restaurant they see first. Repeat customers, the cheapest sales you will ever make, are rented rather than owned.

What 0% commission changes, and what it does not

Zero-commission ordering through your own WhatsApp bot and branded website is not free selling. What you pay instead:

• a monthly subscription for the software (see our pricing for current plans);
• payment processing on prepaid orders, whether the customer pays by Raast, JazzCash, Easypaisa or card. Ask for the rate card rather than assuming a number;
• delivery, either your own riders or a third-party fleet per order.

What changes is the shape of the cost. A subscription is flat; it does not grow when a customer orders for the fifth time. Processing is charged on prepaid orders only, and cash on delivery remains an option. Most importantly, every customer who orders through your channel is yours: their number, their favourites, their consent to hear from you about Friday's special.

Re-run the worked example with 40% of those orders moved to your own channel. That is 16 orders a day, PKR 720,000 a month in sales that no longer carry commission. At the 25% illustrative row, that is PKR 180,000 a month back in the business before your subscription and processing costs. For most single outlets those costs are a fraction of that figure, which is the whole point.

When to keep the marketplace

Dropping the marketplace entirely is usually the wrong move, at least at first. Keep it when:

• You are new, or new to an area. Discovery is what marketplaces are genuinely good at. A customer in a sector you have never served will find you there first.
• You have spare kitchen capacity at off-peak hours. A commission-heavy order at 4 p.m. on a Tuesday is still better than an idle tandoor, as long as the order is not actually loss-making after vouchers.
• Your own channel is not ready. Sending customers to a WhatsApp number that answers in twenty minutes is worse than losing a share to a platform that answers in seconds.

The trap is treating the marketplace as your whole business rather than as paid acquisition.

The split that works: discovery there, repeat here

Let the marketplace bring you first-time customers, then make the second order happen on your own channel:

1. Put a WhatsApp QR code on every packaging sticker and bag, including marketplace orders.
2. Offer a first-order reason on your channel: free delivery, a free drink, a loyalty-points head start.
3. Confirm every own-channel order inside the chat, with a pay-link for Raast, JazzCash, Easypaisa or card, and cash on delivery for those who prefer it.
4. Use opted-in broadcasts sparingly: one message when biryani is back, not daily spam.
5. Watch the mix monthly. As repeat orders move across, your blended commission drops without your having to fight the platform.

Run your own numbers

You need five figures: marketplace orders per day, average ticket, the commission rate in your contract, your food-cost percentage, and the share of those orders that come from customers who have ordered from you before. Multiply the first two by 30 for monthly sales, apply the rate for monthly commission, then apply the repeat share to see how much of that commission is being paid on customers you already have. That last number is the one to act on.

If you would rather have us do the arithmetic with you on a call, book a demo. Bring last month's marketplace statement; we will show you the same menu running on WhatsApp and your own site, and what the month would have looked like with the repeat orders on 0% commission.