A cloud kitchen sells almost everything through delivery apps, and the app keeps part of every order. If you list the same price you would charge in a restaurant, or work out your margin on the full menu price, you keep far less than you think. Add packaging that has to survive the trip, promotions you pay for, and the rent on the kitchen. A dish that looks profitable on the menu can leave you very little per order.
What eats a cloud kitchen's margin
- App commission. A percentage of the price of each order. It varies by app and by contract, so check yours.
- Sales tax. If your prices include it, that part is not yours. Check your local tax rules.
- Delivery packaging. Containers, bags, seals, cutlery, sauce pots. Usually more expensive than serving on a plate.
- Promotions and discounts. If you fund the discount, it comes out of your margin, and the commission is still charged.
- Kitchen rent and utilities. Monthly fixed costs that do not fall when orders do.
- Several brands in one kitchen. They share ingredients, staff and rent, and it is easy to lose track of what each one earns.
Worked example: a burger box on a delivery app
Your loaded cost per burger box is $6.90: ingredients $4.60, packaging $0.90, labour $1.00, energy $0.40. On the app it sells for $16.00. For this example, say the app takes 30% of the price, and there is no sales tax in the price.
| Item | Amount |
|---|---|
| Price on the app | $16.00 |
| Example commission: 16.00 × 30% | −$4.80 |
| What you receive | $11.20 |
| Loaded cost | −$6.90 |
| You earn per order | $4.30 |
Your margin on what you actually receive is 4.30 ÷ 11.20 = 38.4%. On the app price it is only 4.30 ÷ 16.00 = 26.9%.
Now say the app offers a 20% discount promotion that you fund. The price drops to $12.80. The example commission is 12.80 × 30% = $3.84. You receive 12.80 − 3.84 = $8.96, and after the $6.90 cost you earn $2.06 per order. To earn what you made without the promotion, you need about twice as many orders (4.30 ÷ 2.06 = 2.1).
For a 40% margin on what you receive, with that example commission, the app price would need to be 6.90 ÷ 0.60 ÷ 0.70 = $16.43. The guide on setting a price that hits your target margin walks through the formula, including sales tax.
The numbers that matter most
What you keep per order after commission and tax. Every other calculation starts here. The guides on selling on delivery apps and payment fees and commissions in your price show how to work it out for each channel.
Packaging cost per order. Count everything that goes in the bag. Read how to cost packaging and labels.
Grams per portion. In a kitchen with several cooks, portions grow on their own. Weigh and fix the quantity in each recipe; the guide on portion control shows what over-portioning costs.
Profit by channel. The same dish sold through the app, through your own ordering link with your own driver, or for collection leaves different amounts. The guide on comparing profit by channel helps you line them up.
The real cost of each promotion. Before you accept a discount, work out how many extra orders you need. The guide on what a discount really costs you has the method.
Numbers per brand. If you run two or three brands from the same kitchen, keep sales and costs separate for each. Read running more than one brand from one kitchen.
How to keep track
Each week, download the sales report from each app and record orders, gross sales, commissions, discounts you funded and what was paid out to you. Compare it with that week's purchases. If payouts minus purchases do not cover rent and wages, the problem is the price or the promotion, not the sales volume.
Do it with the calculator
The food cost calculator costs one dish at a time and saves nothing, so note the result or copy the link. Enter the recipe, packaging, minutes of work, any sales tax included in the price and your app's commission. It returns what you keep per order and the app price you need for your margin.