Wix’s OpenRest buy may help small restaurants succeed online

Written By Unknown on Rabu, 29 Oktober 2014 | 17.08

The expected acquisition of a restaurant services app maker by Wix.com could open the door for less-expensive Web marketing opportunities for mom-and-pop restaurant owners — while possibly putting pressure on GrubHub and Seamless.

The purchase of OpenRest by Wix.com, a user-friendly Web site-building platform for small businesses, is expected to be announced as soon as Wednesday. Terms of the deal could not be learned.

Services like Grubhub and Seamless, which increasingly have become default online venues for smaller restaurants, can charge 15 percent to 20 percent of the tab on every order processed through their sites.

That's a punishing rate for an industry whose margins are notoriously razor-thin, business owners said.

Breads Bakery off Union Square, which for the past two years has operated a Web site it developed with Wix, doesn't even consider Seamless an option right now, says co-owner Gadi Peleg.

"Our margins are such that I can't give anybody 15 percent and still enjoy a profit," Peleg said. "In that case, I'm working for them."

Building and maintaining a Wix site costs anywhere from free to $25 a month, depending on the services used, said Eric Mason, director of marketing.

"We don't get any kind of commission on transactions," Mason told The Post. "We don't think we'll replace these other services, but we give the small business owner a chance to fend for themselves."

In addition to steep fees, restaurant review and ordering sites have drawn complaints over bogus reviews and customer ratings that are gamed according to whether restaurants are paying for ads.

Wix.com shares rose 2.7 percent on Tuesday, to $16.62.


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