A larger delivery zone means more potential customers, but also higher delivery costs per order. Your margin depends on how many extra orders you get versus the extra delivery costs. In this article, you'll learn step-by-step how to calculate this before you expand.
What changes with a larger delivery zone?
If you go from 3 to 10 kilometers, your costs per delivery increase significantly. At the same time, you get access to more potential customers. The question is: does the extra revenue compensate for the extra costs?
Extra costs when expanding
With a larger delivery zone, you'll face:
- Higher fuel costs: On average €0.30 per extra kilometer
- More driving time: Longer routes mean fewer deliveries per hour
- Vehicle wear and tear: More kilometers = higher maintenance costs
- Possibly extra staff: If your volume increases, you'll need more delivery drivers
⚠️ Note:
Don't only calculate fuel costs. Wear and tear, insurance, and time are often the biggest cost factors in delivery.
Calculate your break-even point
For every extra kilometer, you need more orders to stay profitable. Here's how to calculate how many:
💡 Example:
Current situation (3 km zone):
- Average delivery costs per order: €3.50
- Average order value: €28.00
- Platform fee (25%): €7.00
- Net per order: €17.50
New situation (10 km zone):
- Average delivery costs per order: €5.20
- Platform fee remains: €7.00
- Net per order: €15.80
Difference: €1.70 less margin per order
Estimate the extra revenue
A 10 km zone has many more residents than a 3 km zone. But not everyone orders from you. Use this rule of thumb:
- 3 km zone: Approximately 28,000 m² = 28 km²
- 10 km zone: Approximately 314,000 m² = 314 km²
- Potential: 11× more area
But note: farther away often means less loyal customers. Calculate conservatively with 3-5× more orders, not 11×.
💡 Calculation example:
Current revenue: 50 orders/day × €28 = €1,400/day
Expected growth: 3× more orders = 150 extra orders
Extra revenue: 150 × €28 = €4,200/day
But: lower margin per order (€15.80 vs €17.50)
Net extra profit: 150 × €15.80 - 50 × €1.70 = €2,285/day
Test a smaller expansion first
Instead of going directly to 10 km, test 5-6 km first. This way you see if there's demand without too much risk. Measure after 2 weeks:
- How many extra orders do you get?
- What's your average delivery time?
- What does delivery actually cost?
- Do customers come back?
Alternative: increase minimum order value
If delivery becomes more expensive, you can compensate with a higher minimum order value. From €20 to €30 can make a big difference:
💡 Effect of minimum order:
At €30 minimum (was €20):
- Average order increases to €32
- Platform fee: €8.00 (25% of €32)
- Net at 10km: €32 - €8 - €5.20 = €18.80
That's more than your current €17.50 per order!
How do you calculate margin when expanding? (step by step)
Calculate your current costs per delivery
Add up: fuel, driver time (€15/hour), vehicle wear and tear (€0.25/km), insurance. Divide this by the number of deliveries per day to get your cost per order.
Estimate the new delivery costs at 10km
Calculate with 40% longer driving times and 2× more kilometers. On average, delivery costs increase from €3.50 to €5.20 per order when expanding from 3 to 10 km.
Calculate how many extra orders you need
Divide the extra cost per order (€1.70) by your current profit margin per order. If that's €8, you need 1.70/8 = 21% more orders to break even.
Test with a smaller expansion first
Go to 5-6 km instead of directly to 10 km. Measure your actual costs and extra orders for 2 weeks. Only then can you reliably calculate for 10 km.
✨ Pro tip
Start expanding only during quiet times (Monday-Wednesday). This way you can measure the impact without disrupting your normal service, and you build experience gradually.
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
How many extra orders do I need to break even?
That depends on your current margin per order. If delivery becomes €1.70 more expensive and your margin is €8, you need 21% more orders. With a margin of €5, that's already 34% more orders.
Can I pass the extra costs on to my prices?
Yes, a higher minimum order value usually works better than more expensive menu prices. From €20 to €30 minimum usually increases your average order to €32, which compensates for the extra delivery costs.
How do I know if there's enough demand in the expanded zone?
Check how many restaurants already deliver in that zone and how busy they are. Also look at population density: 10 km outside the city often has less potential than 10 km in an urban area.
What if my delivery times become too long?
Delivery times above 45 minutes lead to complaints and fewer repeat orders. Consider then excluding distant zones during busy times, or hire a second delivery driver.
Should I charge different prices per distance?
You can, but it's complex for customers. Better is one price with different minimum order values: €25 up to 5km, €35 up to 10km. This way you compensate for extra costs without confusion.
📚 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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