Over 60% of breakfast delivery businesses fail within their first year due to poor margin calculations. Most entrepreneurs overlook packaging costs and delivery time, unknowingly bleeding money with each order. Here's your step-by-step guide to calculating exact margins, including every hidden cost.
What is margin in delivery?
Margin represents the percentage of your selling price that stays in your pocket after covering all expenses. Delivered breakfast packages involve multiple cost layers:
- Ingredient costs (food cost)
- Packaging costs
- Delivery time and costs
- Any platform fees
💡 Example:
Luxury breakfast package for 2 people - selling price €32.00 (incl. 9% VAT):
- Croissants, jam, cheese: €8.50
- Packaging (box, bags): €2.20
- Delivery time (30 min at €15/hour): €7.50
Total costs: €18.20
Calculate your selling price excluding VAT
For accurate margin calculation, you'll always work with the price excluding VAT. Breakfast items fall under the 9% VAT rate.
Formula: Selling price excl. VAT = Selling price incl. VAT ÷ 1.09
💡 Example:
€32.00 ÷ 1.09 = €29.36 excluding VAT
Add up all your costs
Create a comprehensive list of every cost tied to this breakfast package:
- Ingredients: Bread, spreads, drinks, fruit
- Packaging: Boxes, bags, stickers, napkins
- Labor: Packing time + delivery time
- Fuel/gas: For delivery
⚠️ Heads up:
Those tiny extras add up fast: butter, sugar, tea, napkins. These "forgotten" costs easily reach €1-2 per package.
Calculate your margin percentage
Now you can determine your margin using this formula:
Margin % = ((Selling price excl. VAT - Total costs) ÷ Selling price excl. VAT) × 100
💡 Example:
Selling price excl. VAT: €29.36
Total costs: €18.20
Margin = ((€29.36 - €18.20) ÷ €29.36) × 100
Margin = 38.0%
What's a good margin for breakfast delivery?
A sustainable margin for delivered breakfast packages sits between 35% and 45%. Anything below 30% makes covering fixed costs nearly impossible.
- Below 30%: Dangerously low margin
- 30-35%: Acceptable, but risky
- 35-45%: Healthy margin
- Above 45%: Excellent performance
A pattern we see repeatedly in restaurant financials shows that businesses with consistent 35%+ margins survive seasonal fluctuations much better than those operating below this threshold.
Pitfalls in breakfast delivery
Watch for these margin-killing mistakes:
- Oversized portions: An extra cheese slice costs €0.80
- Premium packaging: Fancy boxes run €3+ per unit
- Extended delivery routes: Trips over 30 minutes drain profits
- "Free" add-ons: Honey, jam, butter aren't actually free
💡 Example pitfall:
You include 3 croissants as standard instead of 2:
- Extra croissant: €0.65
- At 50 packages per week: €32.50
- Per year: €1,690 less profit
How do you calculate the margin on a breakfast package? (step by step)
Create a cost overview
List all ingredients with exact quantities and prices. Don't forget packaging, napkins and small extras like butter and jam. Also add up your time for packing and delivery.
Calculate selling price excluding VAT
Divide your selling price by 1.09 to get the price excluding 9% VAT. Use this price to calculate your margin. For example: €32.00 ÷ 1.09 = €29.36 excl. VAT.
Calculate your margin percentage
Use the formula: ((Selling price excl. VAT - Total costs) ÷ Selling price excl. VAT) × 100. A healthy margin for breakfast delivery is between 35% and 45%.
✨ Pro tip
Calculate margins on your 5 weekend breakfast packages every 2 weeks. Weekend orders typically represent 70% of breakfast delivery volume, so nailing these numbers secures your profitability.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Should I include VAT in my margin calculation?
No, always calculate with the price excluding VAT. VAT is money you pass on to the tax authority, not your revenue. For breakfast, that's 9% VAT.
What are realistic packaging costs per breakfast package?
Budget €1.50 to €3.00 per package for decent packaging. Cardboard boxes, plastic bags and stickers quickly cost more than you'd think.
How do I convert my delivery time into costs?
Multiply your hourly rate × time spent. If you're worth €15 per hour and spend 30 minutes, that's €7.50 in labor costs for that package.
What if my margin comes in below 30%?
Then you're not earning enough. Raise your price, reduce your portions or find cheaper ingredients. Below 30% margin makes it hard to cover your fixed costs.
Can I include platform costs (food delivery apps) in the calculation?
Yes, if you deliver via a platform, deduct that commission (usually 15-25%) from your selling price before calculating margin.
How do I handle seasonal ingredient price fluctuations in my margin calculations?
Review your margins monthly during peak seasons like summer fruit or winter citrus periods. Build a 5-10% buffer into your pricing to absorb these cost swings without constantly adjusting menu prices.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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