Commission, or a discount you control
Both cost you a percentage. Only one lets you decide what it is.
Two ways to pay for a customer
A restaurant that wants to be seen almost always pays a percentage. The question is not whether you give up a percentage, but who decides what it is, and what it is taken from.
The two models look alike on a brochure. They behave nothing alike in a bad month.
The commission model
You are listed on a platform. It sends you customers. On every cover it sends, it takes a percentage.
What is comfortable about it: you only pay when someone actually comes. Nothing up front, no subscription to carry through a quiet month.
What is less comfortable:
- The percentage is not yours. The platform sets it and can change it.
- It is usually taken from the whole bill, drinks included, so from lines whose margin is nothing like your food margin.
- It applies to the customer who would have come anyway, as long as they arrived through the platform. You are then paying for a visit you already had.
- The relationship is not yours. They know the platform, they remember the platform, and they will go back to it to choose their next restaurant.
The model where you set the discount
You are visible to people looking for somewhere to go. You decide the discount you offer. Nobody takes a cut of what goes through your till.
What is comfortable about it: the percentage is yours, it only covers what you say it covers, and the customer settles their bill with you, at your till, with nobody in between.
What is less comfortable: nothing guarantees anyone turns up. No one has a financial stake in sending you covers to earn their cut, which removes the commission and removes that incentive along with it.
That is a genuine trade-off, and it deserves stating honestly rather than being settled on your behalf.
The arithmetic, over a month
Take twenty covers at 40 euros, so 800 euros of turnover, at 65% margin.
At 15% commission on the bill, you hand over 120 euros. Against 520 euros of margin, that is 23% of it. You owe it on all twenty covers, including the ones that would have come regardless.
At a 10% discount you set, you give away 80 euros. Against 520 euros of margin, that is 15%. If you exclude drinks, it falls further.
The numbers shift with your menu and your margin, and that is the point: in one case you are applying somebody else's formula, in the other you are applying your own.
What should actually decide it
Not the headline rate, and not the sales promise, but three questions:
- Can I change what I give away?
- Can I stop tomorrow, without notice?
- Am I paying for customers I already had?
A model that answers yes, yes, no leaves you in control. One that answers no, no, yes takes that away.
CalVal is the first kind: free, no commission on your sales, a discount you set and change yourself, and a switch that takes you out of the app whenever you decide. What CalVal does not do, and will not claim to: guarantee you a number of customers. Nobody can promise that honestly, and a platform that does is mostly selling you its commission.