Online food ordering is one of the hot picks for the entrepreneurs in the current trend. Currently, we have three models are in the market 1. Restaurant listing 2. Own Kitchen 3. Marketplace, which business model would be good to pitch in? How to penetrate the market? What are the challenges? What is the market potential? Well, I am discussing the challenges in all the three models.

Restaurant Listing:

List the restaurants and their menus. The customer can choose the item from any of the restaurants and order.

Challenges in restaurant listing:

• You are not branding for your product.
• On time Delivery is the key.
• Any restaurant would prioritize their counter business first rather online.
• Fewer Profit Margins.
• Delivery and logistics.
• Communication mechanism between the restaurant and the promoter.
• Evolution of technology.
• The majority of the companies are attracting customers with coupons from their pocket, because of no discount from restaurants. How long?

Price and the quality can’t be guaranteed since you don’t own the product. Promoter should have own delivery system to have a good service to the customer. If Dominos, pizza hut, subway and other big brands focus more on the on-line sales how about this model?.

Own Kitchen:

Owning the kitchen and chefs to provide multiple varieties of dishes and cuisines.

Challenges in Own Kitchen:

• On time Delivery all the time
• Maintaining the consistent Quality & taste
• Chef’s attrition
• Pricing should be very competitive
• Wastage kills the profits
• Delivery and logistics
• Extending the services to other locations
• Maintaining the kitchen
• Evolution of technology

Fresh food is a perishable item, delivering hot with high quality to the customer is always a challenge. keep track of the wastage and manage it properly, otherwise profit margins will be sucked out. plan the menu carefully it should not have too many options and too boring either.

Market Place:

The marketplace is a platform for the chefs who are interested and passion about cooking. Chefs can showcase their variety of food and sell through this platform. The customer would have a good amount of choice from multiple chefs.

Challenges in Marketplace:

• You are not branding for your product.
• The profit margin should encourage the chefs who are associated with you.
• The big challenge is to get good quality from the chef all the time because you don’t have to bond with them.
• May need to spend a lot of time to motivate them when the sales are low.
• Chefs may not continue with you if the wastage is more and sales is low.
• On time Delivery is the key.
• Delivery and logistics
• Communication mechanism between chef and promoter.
• Evolution of technology

Need to establish a good process to get the food every day on time from multiple chefs and deliver. if the food delivers from chef’s place to the customer directly, you may end up having a big delivery team. Price and the quality can’t be guaranteed since you don’t own the product. tracking of the whole system is a big challenge.

Anyways, you have to be very aggressive to grab the market in the current eCommerce era. Get out of the orbit to have the minimum customer base to plan further growth, this is one way of doing business and the other way is to have a steady growth it pays back you but you need to have a lot of patience, money, and dedication.

Many start-ups are being opened and closed every day in this sector Online food ordering is in the confused state lets wait and see to have a matured model in place.

Narasimha Mohan

He is the Author, Product Specialist, Business Consultant, Entrepreneur, Public Speaker, Thought provoking writer, and Joke writer. Follow him on Twitter