Swiggy commission

Reduce Zomato & Swiggy Commission from Restaurant Coach – Nitin Kapoor

If you’re like hundreds of Indian restaurant owners we speak to every month, a sinking feeling hits when you see your monthly Zomato and Swiggy settlement statements. What started as a 15-20% commission has quietly ballooned to 25-35% of every order after packaging fees, priority listing charges, and advertising costs. The platforms brought you customers, but now they might be eating your entire profit margin.

At RestaurantCoach.in, we’ve guided over 500 restaurant and cloud kitchen owners across India—from Mumbai’s bustling lanes to Bangalore’s tech parks—to reclaim profitability and reduce dependency on these aggregators. The good news? You can negotiate better terms, optimize your operations, and build a more sustainable business.

This isn’t about quitting platforms entirely—that’s unrealistic for most. It’s about strategically reducing their cost and influence on your bottom line. Let’s dive into the real numbers and the seven proven strategies our coaching clients use successfully.

The Real Cost of Aggregator Dependency: It’s More Than Just Commission

Before we solve the problem, let’s quantify it. When a customer pays ₹500 for an order on Swiggy, here’s where the money often goes:

• Platform Commission:20-30% (₹100-₹150)
• GST on Commission:18% on the fee (₹18-₹27)
• Payment Gateway Charges:2-3% (₹10-₹15)
• Platform Packaging Fee:₹5-₹15 per order
• Priority/Visibility Boost Spending:Variable, but often essential to stay visible.

Your net realization can be as low as 60-65% of the menu price. For a restaurant with a 20% net profit margin, this means delivery platforms are taking more profit than you are. A 2023 industry survey revealed that 35% of Indian restaurants actively want to quit these platforms but feel trapped, seeing no clear alternative.

The goal isn’t necessarily to leave, but to ensure these platforms serve you, not the other way around.

Strategy 1: Menu Engineering for Platform Orders

You control your menu. Use that power.

• Create Platform-Specific Menus:Your Zomato/Swiggy menu should NOT be identical to your in-dining menu. Factor in the full commission cost and create items with a higher perceived value and better food cost ratio.
• Implement Strategic Price Differencing:It is perfectly legal and logical to have slightly higher prices (8-12%) on aggregator platforms compared to your direct ordering channels (website, phone, WhatsApp). This offsets the commission. Clearly state on your direct channels: “Order directly from us for the best price.”
• Bundle for Higher Average Order Value (AOV):Combat small, unprofitable single-item orders by creating “Meal for 2,” “Family Feasts,” or “Weekend Special Bundles.” This increases the ticket size, diluting the fixed cost of commission and packaging.

Coaching Insight: At RestaurantCoach.in, we often conduct “Menu ROI Audits” for clients. One Ahmedabad café increased its platform AOV by 28% simply by re-engineering 5 key combo meals, protecting their margin despite the commission.

Strategy 2: Build Your Direct Delivery Channel (Your Most Powerful Asset)

Your website and phone number are not relics; they are lifelines to profitability.

• The WhatsApp Ordering Engine:This is the #1 tool for Indian restaurants. Train your staff to politely redirect call-in queries to a dedicated business WhatsApp number. Offer a small incentive (a free dessert or ₹50 off) for the first WhatsApp order. Share a digital menu, accept orders and UPI payments, and use a delivery partner like Dunzo, WeFast, or even a dedicated rider for local zones.
• Invest in a Simple, Order-First Website:You don’t need a complex site. You need a fast, mobile-friendly page with your menu, prices, and a direct ordering widget (services like Resty, Peppo, or DotPe offer affordable solutions). The key? Promote it everywhere—on packaging, in-platform order inserts (where allowed), and social media.
• Loyalty Directly to Customers:Use a simple Google Sheet or affordable CRM to track phone/WhatsApp orders. Offer a “10th order free” loyalty program. You own this customer data forever; the platforms don’t.

Strategy 3: Renegotiating Platform Terms (When & How to Approach)

Yes, you can negotiate. The key is leverage.

• When You Have Leverage:
  • You have a high platform rating (>4.3)and a low cancellation rate.
  • You consistently rank in the top 5-10 for key search terms in your locality.
  • You have a growing direct order volume (this is your best bargaining chip).
  • You operate in multiple, high-demand locations.
• How to Approach: Don’t just complain. Schedule a meeting with your Account Manager. Present data: “We love the orders you bring, but at a 30% take rate, our net profit is negative. With our direct channel growing, we need to consolidate volume. Can we work on a tiered commission model (lower rate for orders above a certain volume) or a reduced rate for maintaining our high service metrics?”

Coaching Insight: A Gurugram cloud kitchen client of ours used their 40% direct order volume as leverage to secure a 22% all-in commission with Swiggy, down from 28%. Every percentage point saved goes straight to your bottom line.

Strategy 4: The 60-40 Rule: Cap Your Platform Dependency

This is a cornerstone of our coaching at RestaurantCoach.in.

Never let any single aggregator platform contribute more than 40% of your total revenue. Aim for platforms combined to be ≤ 60% of your business.

This rule forces you to diversify and build resilience. If Zomato changes its algorithm or Swiggy hikes fees overnight, your business isn’t crippled.

Strategy 5: Cloud Kitchen Economics & Leveraging Lower Rates

If you operate a Cloud Kitchen or Delivery-Only Brand, you have unique advantages.

• Multi-Branding on Single Kitchen:Operate 2-3 different cuisine brands from the same kitchen on the platforms. This allows you to capture more virtual “real estate” in your area and negotiate better overall platform rates due to higher combined volume.
• Location Arbitrage:Set up your kitchen in a lower-rent area, but list on platforms serving high-demand, high-income residential or office zones. Your lower real estate cost can help absorb platform commissions more easily than a high-rent dine-in location.
• Hybrid Dine-in + Cloud Kitchen:If you have a dine-in restaurant, use the existing kitchen to run a separate, delivery-optimised brand. This maximises kitchen utility and creates a new revenue stream.

Strategy 6: Packaging & Pricing Optimization

Small leaks sink great ships. Optimise every paisa.

• Right-Size Your Packaging:Work with your supplier to create packaging that fits your most popular items perfectly. Avoid oversized boxes that increase costs. Use cost-effective materials that still ensure food quality—this is a balance our coaches often help clients strike.
• Implement a Separate Packaging Charge on Platforms:Instead of raising all item prices, add a clear, separate “Delivery Packaging Fee” of ₹10-₹20 on aggregator orders only. Customers understand this, and it directly offsets a variable cost.
• Negotiate with Packaging Suppliers:Your monthly packaging bill is significant. Leverage that volume. Get quotes from 3-4 suppliers annually. A 10% reduction in packaging cost directly improves margin.

Strategy 7: Data Analysis for Platform ROI (Stop Guessing)

You must know the true profitability of each channel.

• Calculate NetPlatform Margin: For one week, track every cost attributable to platform orders: Food Cost + Commission + Packaging + Platform Ads + Labour for platform order prep. Divide by total platform sales. This is your true cost. The remainder is your net margin.
• Measure Customer Lifetime Value (LTV) by Channel:A customer who finds you on Zomato but then switches to direct ordering is highly valuable. Track this migration. Conversely, if a customer only ever uses deep-discount platform offers, they may be unprofitable.
• Audit Your Platform Ad Spend Weekly:Are you spending ₹2000 a week on “Visibility Boost” for a ₹3000 net profit from platforms? That’s a poor ROI. Platform ads should be turned on strategically (rainy days, new menu launches) and turned off when base visibility is sufficient.

RestaurantCoach.in Real Examples: Before & After

Case Study 1: The Bangalore QSR (Cloud Kitchen)

• Problem:90% revenue from Swiggy/Zomato at 32% effective commission. Net margin: 3%.
• Coaching Action:Implemented a direct WhatsApp ordering system with a 15% discount (still 10% cheaper for customer than platforms). Launched a second pizza brand from same kitchen. Renegotiated platform rates.
• Result in 6 Months: Direct channel now 35% of sales. Effective commission rate reduced to 24%. Net margin increased to 14%.

Real Example 2: The Delhi Cafe (Dine-in + Delivery)

• Problem:Dine-in traffic was down, delivery was 60% of sales but barely breaking even.
• Coaching Action:Introduced the 60-40 Rule. Created a premium “At-Home Experience” bundle sold only via WhatsApp. Trained staff to promote direct ordering. Re-engineered platform menu with higher-margin combos.
• Result in 4 Months:Platform contribution down to 45%. Direct delivery (WhatsApp/website) now 25% of sales. Overall profitability increased by 11%.

Real Example 3: The Mumbai Multi-Cuisine Restaurant

• Problem:Stuck in “discount loop” on platforms, destroying brand value and margin.
• Coaching Action:Drastically reduced platform-only discounts. Used saved money to fund a “Loyalty Card” for dine-in and direct orders. Focused on impeccable service to boost platform ratings organically, gaining free visibility.
• Result: Platform rating rose from 4.1 to 4.5. Discount spend reduced by 70%. Customer perception shifted from “discounter” to “quality provider.”

Need a bespoke plan for your restaurant?

These seven strategies are a starting point. Every restaurant’s situation—your location, cuisine, team, and goals—is unique. Implementing them without a clear plan can be overwhelming.

Our restaurant coaching program at RestaurantCoach.in has helped 100+ Indian restaurants increase net profit margins by 8-15%. We provide a structured, step-by-step plan tailored to your business.

Schedule a free 30-minute consultation with our team. We’ll analyze your current statements, identify your biggest leverage point, and chart a clear path to reduce fees and increase profits.

Click Here to Schedule Your Free Profitability Audit

FAQ: Reducing Zomato & Swiggy Commission

Q1: Is it legal to have different prices on Zomato/Swiggy than my own menu?
A: Yes, absolutely. You are free to set your prices on each sales channel. The platforms may have rules against directing customers off their app within the app, but pricing differently is standard business practice to account for channel costs.

Q2: Can Zomato/Swiggy delist me if I try to negotiate or build direct channels?
A: They are commercial platforms that profit from your sales. Delisting a high-quality, popular restaurant hurts their inventory and customer choice. As long as you maintain good service metrics, the risk is very low. Building a direct channel actually makes you a more stable business partner for them.

Q3: What’s the fastest strategy to start seeing results?
A: Implement Strategy 2 (Direct Channel) and Strategy 1 (Menu Engineering) simultaneously. Launch your WhatsApp ordering today with a special offer, and by tomorrow, adjust 3-5 popular platform items into higher-margin combos. You’ll see a difference in the next week’s data.

Q4: I’m a very small restaurant with just 2-3 staff. Can I do this?
A: Yes! In fact, it’s more critical. Start with WhatsApp. A single staff member can manage orders during peak times. The direct margin you save could fund an additional part-time helper.

Q5: Where can I learn more about restaurant business fundamentals in India?
A: Explore resources from the National Restaurant Association of India (NRAI) and ensure all your practices comply with FSSAI regulations. For business strategy and profitability deep-dives, the blog at RestaurantCoach.in is built specifically for Indian food entrepreneurs like you.