Pricing 6 min read

How to calculate delivery menu margins

Delivery profit is not the same as dine-in profit. Platform commission, packaging, payment fees, and discounts all reduce what you keep from each order.

A menu item that is profitable dine-in can be underwater on delivery. The food cost percentage is the same either way — what changes is how much of the selling price you actually keep after the platform takes its cut.

Understanding delivery margin is not optional if you sell on DoorDash, Uber Eats, or Grubhub. It is how you decide which dishes to push on delivery, what delivery prices to set, and whether a platform is worth keeping at all.

The full delivery margin formula

Delivery profit = selling price minus recipe cost minus packaging minus platform commission minus payment fees minus discounts and promotions

Each of these elements deserves a number, not a guess.

A full worked example

A rice bowl sells for $14.00 on delivery. Here is the full breakdown:

Recipe cost (ingredients + prep): $3.80

Packaging (container, bag, utensils): $0.85

DoorDash commission at 25%: $3.50

Payment processing fee: $0.35

Promotional discount (10% weekend promo, your cost): $1.40

Delivery profit: $14.00 minus $3.80 minus $0.85 minus $3.50 minus $0.35 minus $1.40 = $4.10

Delivery margin: $4.10 divided by $14.00 = 29.3%

The same rice bowl dine-in at $12.00 with no packaging or commission earns $12.00 minus $3.80 = $8.20 gross profit — twice as much per sale.

Platform commission rates

Commission rates vary by platform and contract tier. Approximate US ranges:

DoorDash: 15 to 30% depending on tier and marketing program enrollment

Uber Eats: 15 to 30%, with lower rates for restaurants that opt out of their delivery network

Grubhub: 15 to 25% plus payment processing and marketing fees

Always use your actual contract rate. Published ranges are starting points, not what you are paying.

Packaging costs add up

Delivery packaging (insulated bags, sealed containers, side containers, utensils) costs meaningfully more than dine-in serviceware. A full delivery order with soup, a main, a drink, and condiments can carry $1.50 to $2.50 in packaging alone.

If you are not measuring packaging cost per order, you are likely underestimating your delivery cost by $1 to $2 per transaction.

Should delivery prices be higher than dine-in?

Yes, in most cases. Delivery customers are not surprised by delivery prices being 10 to 20% higher than dine-in — the platform UI makes the comparison harder and consumers accept a convenience premium.

A common approach: set delivery prices to recover the commission, so your gross profit per delivery order is similar to dine-in. If commission is 25%, a dine-in price of $12.00 would need a delivery price of roughly $16.00 to maintain the same gross profit (ignoring packaging).

How to decide if a platform is worth keeping

Calculate average delivery margin across your top 10 selling items on each platform. If the margin is consistently below 20%, the platform is consuming your profit. At that point you have three options: raise delivery prices, remove low-margin items from the delivery menu, or renegotiate your commission rate.

Platforms will sometimes negotiate, especially if your order volume is meaningful or if you threaten to leave.

Frequently asked questions

Does DoorDash charge the restaurant or the customer for delivery? Both. The restaurant pays a commission (15 to 30% of the sale). The customer pays a delivery fee and often a service fee. These are separate charges.

Should I have a different menu for delivery? Yes. Many operators remove low-margin items, items that travel poorly, or items that require expensive packaging from their delivery menu. A smaller, optimized delivery menu often earns more profit per order than the full dine-in menu.

What is a healthy delivery margin? Most operators target 20 to 30% gross delivery margin (before labor and overhead). Below 15% means the platform is taking too much of the sale for the arrangement to be sustainable.

Do I need different prices on each platform? Not necessarily, though it is allowed. Many operators set one unified delivery price higher than dine-in and use it across all platforms. Others optimize per platform based on commission differences.

How does a discount or promo affect my margin? Discounts you fund come directly out of your delivery profit. A 10% off promotion on a $14 sale that you pay for reduces your revenue to $12.60 before commission — then the commission is calculated on $14, not $12.60, making the effective hit larger than 10%.

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