Are your discount codes actually costing you money instead of bringing in profits? You offer a discount, but platform fees often stay based on the original price, which can seriously impact your bottom line. Here's how to calculate your real margin during promotions.
Why promotions mess with your margin
Delivery involves multiple cost layers and discounts. A 20% discount code looks straightforward, but you often still pay the full platform fee to Thuisbezorgd or Uber Eats.
💡 Example:
A pizza for €18.00 with a 20% discount code:
- Customer pays: €14.40
- Platform fee (25% of €18.00): €4.50
- Your receipt: €14.40 - €4.50 = €9.90
- Ingredient costs: €5.40
Real margin: €4.50 on €14.40 = 31%
The formula for delivery margin with promotions
For accurate calculation, use this formula:
Real margin = ((Amount received - Ingredient costs - Packaging costs) / Amount received) × 100
Where amount received = Customer price after discount - Platform fee - Payment costs
⚠️ Note:
Platform fees are often calculated on the original price, not the discounted price. Check this with your platform.
Different types of promotions
Each promotion hits your margin differently:
- Percentage discount: Simplest form, but platform fee often stays the same
- Free delivery: You pay the delivery costs, customer pays full product price
- Minimum order discount: Encourages higher order value, can improve margin
- BOGO (buy one get one): Double food cost, same platform fee
💡 BOGO example:
Two pizzas for the price of one (€18.00):
- Customer pays: €18.00
- Platform fee (25%): €4.50
- Ingredient costs (2 pizzas): €10.80
- Packaging: €1.20
Margin: €1.50 on €18.00 = 8.3% (very low!)
Platform-specific differences
Each platform has different rules for discounts - something most kitchen managers discover too late after running several unprofitable promotions:
- Thuisbezorgd: Platform fee usually on original price
- Uber Eats: Sometimes shared promotion costs with restaurant
- Deliveroo: Varies by contract and promotion type
⚠️ Note:
Always check your contract and invoices. Some platforms calculate differently than expected, especially with your own promotions versus platform promotions.
When promotions actually work
Promotions can make sense if:
- They lead to higher order frequency from existing customers
- Average order value increases (cross-selling)
- You have overcapacity during quiet periods
- You acquire new customers who later order at full price
💡 Break-even example:
20% discount break-even at 25% platform fee:
- Normal margin: 35% on €20 = €7.00
- With discount: 35% on €16 = €5.60
- Difference: €1.40 per order
You need 1.25x more orders to earn the same amount.
Tools for margin monitoring
With a system like KitchenNmbrs, you can calculate different scenarios before launching promotions. You'll immediately see what each discount action does to your profitability per dish.
How do you calculate delivery margin with discounts?
Gather all costs and prices
Note the original selling price, discount percentage, platform fee percentage, ingredient costs, and packaging costs per order. Check whether platform fees are calculated on the original or discounted price.
Calculate what you actually receive
Subtract the platform fee, payment costs, and any other costs from the discounted price. This is the amount that actually reaches your account.
Calculate your real margin
Subtract all direct costs (ingredients, packaging) from the amount received. Divide the result by the amount received and multiply by 100 to get the margin percentage.
✨ Pro tip
Test every new promotion on just 15% of your weekly orders for 3 days before going full scale. This prevents major losses if your margin calculations were off.
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 with discounts?
Always calculate excluding VAT. First subtract the 9% VAT from all amounts before calculating your margin. The discount usually applies to the price including VAT.
How do I know if my platform fee is calculated on the original price?
Check your invoice or dashboard from the delivery platform. If in doubt, contact your account manager. This varies per platform and sometimes per promotion type.
What is an acceptable margin with promotions?
At least 15-20% to cover your fixed costs. Below 10% you're probably losing money, unless you compensate with volume or cross-selling.
Can I use different margins per delivery platform?
Yes, that's smart. Each platform has different fees and conditions. Adjust your prices per platform to maintain a consistent margin.
How often should I check my delivery margins?
At least weekly, especially during promotion periods. Platform fees and promotion terms can change, directly affecting your profitability.
Do platform-sponsored promotions affect my margin differently than my own discounts?
Usually yes. Platform-sponsored promotions often mean the platform covers part of the discount cost. Your own discount codes typically come entirely from your revenue.
Should I factor in labor costs when calculating promotion margins?
For accurate profitability, yes. Add €2-3 per order for kitchen labor and overhead costs. This gives you a more realistic picture of whether promotions actually generate profit.
📚 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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