Guide · Hospitality margins · UK
Delivery looks like growth on the till. Here is what an order actually leaves behind once the platform, the taxman and the fees have taken their share.
Delivery sales look like growth on the till. Whether they are growth on the bottom line is a different question, and the honest answer is often no.
Listing on a full service delivery platform, where the platform provides the rider, typically costs somewhere between a quarter and just over a third of the order value in commission. That number alone is bracing, but it is only the start. Commission usually carries VAT on top, so the effective bite is larger than the rate quoted. Payment processing takes a slice. Refunds and complaints can be clawed back against you. Packaging is an added cost that dine in never carries. By the time an order has run that gauntlet, the cash that reaches your account can be far below what the sale suggested, and on a small order the deductions can swallow the profit entirely.
Do the maths once, properly
The only way to price and plan delivery sensibly is to work out the real take home on a typical order, not the headline value. Three deductions do most of the damage, and they stack.
Run a real order through those and you see why a dish that is comfortably profitable on the counter can barely break even through an app. The food and labour cost the same to produce, but a third or more of the revenue never arrives. That does not make delivery worthless, but it does mean it has to be priced and managed as its own channel, with its own numbers.
Making delivery pay
The operators who make delivery work treat it deliberately. Many set delivery menu prices a little above their in house prices to offset the commission, a common and accepted practice as long as it is done sensibly. They limit the menu to dishes that travel well and package cheaply, dropping items that arrive poorly or cost too much to protect in transit. They watch which orders actually make money rather than assuming all sales are equal. Above all, they use the platforms as a way to reach new customers, then work to convert those customers to a direct channel where no commission applies.
Capacity matters as much as pricing. A rush of app orders on top of a full dining room can overwhelm a line that was never planned for it, so it pays to think about planning kitchen capacity for a growing delivery business before the volume arrives, and to have a plan for how to handle a sudden doubling of delivery orders without service falling apart and clawbacks climbing.
The bigger picture
Delivery brings reach, incremental sales and access to customers who would never have found you otherwise, and for a quiet site or a new opening that is real value. The danger is depending on it. When a large share of your revenue runs through a platform, your margin is set by someone else's commission and your visibility by their algorithm, both of which can change without warning. A single rate rise can turn a thin profit into a loss overnight.
The same delivery only maths shapes an entire business model, which is exactly why ghost kitchen economics are so unforgiving. Treat platforms as one channel among several, keep a direct route to your customers, and know your real take home on every order, and delivery becomes a useful addition rather than a trap you cannot afford to leave.
Questions
More than the headline commission. Full service listings typically take a quarter to a third of the order value, and that commission usually carries VAT on top. Add payment processing, possible per order admin fees, refund clawbacks and packaging, and the cash that reaches your account is well below the sale value shown on the till.
Because it makes the effective rate higher than the number quoted. If a platform charges commission and then adds VAT to that commission, your true deduction is larger than the headline percentage. When you work out whether a dish is profitable through an app, you have to use the effective figure, not the advertised rate.
It is common and widely accepted, provided it is done sensibly. Many operators lift delivery menu prices modestly to offset commission, so the channel does not run at a loss. The key is to keep the increase reasonable and consistent, since customers can compare, and to be sure the adjusted price actually restores a workable margin.
Items that travel well, hold their quality in a box and package cheaply. Drop dishes that arrive soggy, collapse in transit or need expensive protective packaging, because a poor delivery experience drives refunds and bad reviews that cost you twice. A shorter, delivery suited menu is easier to execute at pace and more profitable per order.
Use them, but do not depend on them. Platforms bring reach and new customers, which is valuable, but when a large share of revenue runs through one app your margin and visibility are controlled by their commission and algorithm. Keep a direct ordering route, convert app customers to it where you can, and treat delivery as one channel among several.
Phoenix Duct Clean · by the numbers
More delivery volume means more grease and a harder working extraction system. A certificated deep clean keeps the kitchen running at the pace delivery demands.