A pizza shop owner noticed his €25 orders were barely profitable after covering €3.50 delivery costs himself. Free delivery attracts customers but destroys margins. Paid delivery boosts per-order profit but can reduce volume.
The difference in cost structure
Free delivery means you absorb delivery costs yourself. Paid delivery shifts some burden to customers. This difference directly affects your profit per order.
💡 Example cost structure:
Average order: €25.00 (incl. 9% VAT)
- Sales price excl. VAT: €22.94
- Food cost (30%): €6.88
- Platform fee Thuisbezorgd (25%): €5.74
- Delivery costs: €3.50
Margin before delivery costs: €10.32
Free delivery: you absorb the hit
You cover delivery costs completely. These expenses slice directly into your profit margins.
💡 Example free delivery:
Order €25.00 - free delivery for customer
- Margin before delivery costs: €10.32
- Minus delivery costs: €3.50
Net margin: €6.82 (29.7% of revenue)
Paid delivery: customers share the burden
You charge customers €2.50 to €4.50 for delivery. This boosts your total order value and profit.
💡 Example paid delivery:
Order €25.00 + €3.50 delivery costs = €28.50
- Total excl. VAT: €26.15
- Food cost remains: €6.88
- Platform fee on €28.50: €6.55
- Delivery costs: €3.50
Net margin: €9.22 (35.3% of revenue)
Calculate the volume effect
Paid delivery might reduce order frequency. You'll earn more per order but potentially receive fewer orders. This volume impact determines your total profit - something most kitchen managers discover too late after switching strategies mid-season.
⚠️ Note:
Test both options for at least 2 weeks. One weekend won't reveal the true effect.
Breakeven calculation
Calculate how many orders you can lose with paid delivery while maintaining the same profit as free delivery.
Formula: (Difference in margin per order / Old margin per order) × 100 = Maximum loss %
💡 Example breakeven:
Difference: €9.22 - €6.82 = €2.40 more per order
- Percentage difference: €2.40 / €6.82 = 35%
- 100 orders free = €682 profit
- 65 orders paid = €599 profit
You can lose a maximum of 35% of orders
Practical testing approach
Test both strategies systematically. Track revenue, order count, and average order value. Many operators find paid delivery reduces order volume but increases overall profit.
How do you calculate the impact of delivery options on your margin?
Calculate your current margin per order
Add up: average order value, food cost, platform fee and delivery costs. Subtract everything from your revenue excl. VAT to get your net margin.
Calculate margin with paid delivery
Add delivery costs to order value. Recalculate platform fee on new total. Subtract costs from new revenue excl. VAT.
Determine your breakeven point
Divide the difference in margin by your old margin per order. This percentage shows how many orders you can lose at most.
Test both options for 2 weeks
Measure number of orders, average order value and total profit. Compare the results and choose the option that yields the most.
✨ Pro tip
Test a hybrid approach for 3 weeks: charge €2 delivery within 2km, €4 beyond that distance. This often reduces order volume by only 15% while boosting margins significantly.
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 much delivery cost can I charge?
Common rates are €2.50 to €4.50. Check your competitors and test what customers accept. Too high deters them, too low doesn't cover your costs.
Do I need to calculate VAT on delivery costs?
Yes, delivery costs fall under 9% VAT just like food. Always calculate with amounts excl. VAT for your margin calculation.
What if my orders drop more than the breakeven point?
Then free delivery is temporarily more profitable. Test over a longer period - sometimes customers get used to paid delivery.
How do I measure the impact on customer loyalty?
Look at repeat orders. If regular customers stop ordering with paid delivery, that weighs more heavily than new customers who order once.
Can I charge different delivery costs per distance?
Yes, many platforms support this. Free nearby, paid further away. This combines the benefits of both options.
Should I test during peak or slow periods first?
Start during slower weekdays when you can afford to lose some orders. Peak periods like weekends are too risky for initial testing.
How do I handle customer complaints about delivery fees?
Explain that delivery fees help maintain food quality and service speed. Most customers understand if you're transparent about the reasoning.
📚 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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