Setting a minimum order amount is a strategic move for any restaurant offering delivery or online ordering. It helps to ensure profitability on each order by covering delivery expenses and encouraging customers to order more items. With a minimum order threshold, you can balance delivery costs, optimize resources, and enhance operational efficiency. In this guide, we’ll explore why setting a minimum order amount is essential and walk you through the steps to establish it for your restaurant.

Follow set the minimum order amount settings:

Why Set a Minimum Order Amount?

1. Ensure Profitability
   Setting a minimum order amount helps to maintain profitability, especially with delivery orders. Smaller orders often come with low-profit margins that can be offset by delivery costs, employee time, and packaging. With a minimum order requirement, you can safeguard your bottom line and prevent losses from unprofitable small orders.
2. Cover Delivery Costs
   Delivery costs are a significant part of restaurant expenses, from fuel costs to driver wages. By establishing a minimum order amount, restaurants can cover these costs without needing to charge excessive delivery fees. This balance helps keep delivery costs fair for customers while protecting restaurant revenue.
3. Encourage Larger Orders
   When customers are informed about a minimum order amount, they’re often willing to add more items to their order to meet the requirement. This not only increases order values but can also introduce customers to additional menu items they might not have otherwise tried, ultimately boosting sales and customer satisfaction.

Steps to Set the Minimum Order Amount in Your Restaurant System

Step 1: Define Your Costs

Before setting a minimum order amount, it’s essential to understand your delivery and food preparation costs. Calculate your average food costs, delivery expenses, and other operational factors. This data will help you determine a minimum order threshold that’s reasonable and ensures profitability on each order.

Step 2: Access Your Restaurant Management System

Most online ordering or restaurant management systems, like RestroFood, include a feature for setting minimum order amounts. Start by logging into your system and navigating to the settings or management area where you handle order configurations.

Step 3: Navigate to Order Settings

In many systems, you’ll find the minimum order setting under a section like “Order Settings” or “Pricing.” For example, in RestroFood, you would go to the order management or pricing settings area to access this feature.

Step 4: Set the Minimum Order Amount

Once you locate the minimum order setting, enter your desired minimum amount. Be sure to consider your defined costs and typical order values. For example, if your average cost per order is around $10, you might set your minimum order amount to $15 to ensure profitability.

Step 5: Save and Test the Settings

After entering the minimum order amount, save your settings and test the system. Place a test order below the minimum amount to verify that it prompts customers to meet the requirement. Testing helps ensure a smooth customer experience and ensures the setting is functioning correctly.

Tips for Choosing the Right Minimum Order Amount

1. Know Your Average Order Size
   Use your restaurant’s past data to find the average size of your orders. This helps you set a minimum that won’t alienate customers but is high enough to support delivery costs. For example, if most of your orders are above $20, setting a $10 minimum might be too low and not cover your costs.
2. Consider Your Delivery Radius
   Larger delivery zones often come with higher transportation costs, making a higher minimum order amount reasonable. Adjust your minimum order requirement to account for longer-distance deliveries to avoid absorbing too many expenses.
3. Monitor Customer Feedback
   Keeping track of customer behavior can help determine if your minimum order amount is set too high or too low. If customers frequently abandon carts, it may be a sign to lower the minimum order threshold. Conversely, a high conversion rate could indicate that your current minimum is well-aligned with customer expectations.

Examples of Minimum Order Amounts by Restaurant Type

1. Fast Food Restaurants
   Typically, fast food restaurants set minimum order amounts around $10 to $15, balancing affordability with profitability. This range helps to cover the cost of fast, high-volume orders.
2. Full-Service Restaurants
   Full-service restaurants, where orders might include appetizers, entrees, and beverages, often set minimums around $30 or higher. This is especially common when the restaurant offers delivery over a larger radius.
3. Specialty Cafés or Bakeries
   For cafés and bakeries, minimum orders are often lower, especially if the restaurant only delivers within a small radius. A typical minimum might be $5–$10, depending on average order values.

How to Communicate the Minimum Order Amount to Customers?

1. Clear Display on Checkout Pages
   Display the minimum order amount at checkout so that customers are informed before finalizing their orders. This reduces frustration and helps set expectations upfront.
2. Use Pop-Ups or Banners
   If a customer’s cart total doesn’t meet the minimum, use pop-ups or banners to remind them. A friendly prompt encourages them to add more items, helping them reach the minimum order requirement smoothly.
3. Add Messaging in Confirmation Emails
   Reinforce your minimum order policy in order confirmation emails. This helps customers remember the policy and minimizes surprise on future orders, creating a transparent customer experience.

How does Minimum Order Amount impact customer Experience?

1. Improved Satisfaction
   A well-set minimum order amount improves the delivery experience by ensuring that each order is worthwhile and arrives fresh. Customers often appreciate a restaurant that maintains quality service, leading to higher satisfaction and positive reviews.
2. Customer Retention
   Reasonable minimum order requirements help retain customers by providing a balanced approach to pricing and service. Restaurants that offer a fair minimum order policy are more likely to build a loyal customer base.
3. Impact on Order Abandonment
   Setting the minimum order too high can discourage customers from completing their purchases. By finding the right balance, restaurants can reduce cart abandonment rates and optimize conversions, creating a better user experience overall.

Frequently Asked Questions

Conclusion

Setting a minimum order amount is a valuable strategy for restaurant owners to enhance profitability, manage delivery costs, and improve customer satisfaction. By following the steps outlined in this guide, you can implement an effective minimum order policy that aligns with your business goals and customer expectations. Experiment with different minimum amounts, gather feedback and refine your approach to find the optimal setting for your restaurant’s success.