A minimum order is the order value at which a delivery pays for getting there and leaves you a profit. You work it out like this: the order's cost, minus the delivery fee you charge, plus the profit you want per order, all divided by what each dollar of food leaves you. The same sum without subtracting the fee gives you the order value above which you can offer free delivery.
What an order costs, apart from the food
Some costs come per order, not per item. Delivering one loaf costs about the same as delivering five.
- The delivery itself: a courier's charge, or your fuel, wear and time if you drive. Work it out per zone with the method in the real cost of delivery.
- What goes in every bag: the carrier bag or box, tissue, a thank-you card, the sticker. If it is the same for a small order and a large one, it is a per-order cost.
- Handling time: answering messages, taking payment, sorting the address. If it pulls you away from shaping dough, count it.
The packaging for each item does not go here: that is already in the item's loaded cost.
What each dollar of food leaves you
For the minimum you need one number: how much of each dollar of food sales you keep after the loaded cost. It is your contribution margin as a share of the price.
If a sourdough loaf sells for $9.00 and its loaded cost is $3.60, it leaves 5.40 ÷ 9.00 = $0.60 per dollar. If your products leave very different amounts, use the lowest one so you do not come up short. The guide on contribution margin explains the idea in full.
The two formulas
minimum order = (order cost − fee you charge + profit you want per order) ÷ contribution per dollar
free delivery from = (order cost + profit you want per order) ÷ contribution per dollar
The profit per order is your call. It is what you want left from each order after paying for the food and the delivery. Put zero and the result is your break-even order.
Then round up to a number customers actually reach with your prices. A $15.50 minimum is awkward; $18, the price of two loaves, is easy.
Worked example: a sourdough bakery delivering at weekends
You bake sourdough, focaccia and cinnamon buns and deliver on Saturdays in your own car. Your products leave about $0.60 per dollar of sales. You measured your per-order costs and decided you want $6.00 profit from each order.
| Near zone | Far zone | |
|---|---|---|
| Trip | $6.00 | $10.00 |
| Box, bag, card | $0.80 | $0.80 |
| Order cost | $6.80 | $10.80 |
| Fee you charge | $3.50 | $6.00 |
Near zone:
- Minimum order: (6.80 − 3.50 + 6.00) ÷ 0.60 = 9.30 ÷ 0.60 = $15.50, rounded up to $18
- Check at $18: 18 × 0.60 = $10.80 contribution, plus $3.50 fee, minus $6.80 cost = $7.50
- Free delivery from: (6.80 + 6.00) ÷ 0.60 = 12.80 ÷ 0.60 = $21.33, rounded up to $25
- Check at $25 with no fee: 25 × 0.60 = 15.00 − 6.80 = $8.20
Far zone:
- Minimum order: (10.80 − 6.00 + 6.00) ÷ 0.60 = 10.80 ÷ 0.60 = $18.00
- Check at $18: 10.80 + 6.00 − 10.80 = $6.00
- Free delivery from: (10.80 + 6.00) ÷ 0.60 = 16.80 ÷ 0.60 = $28.00, rounded up to $30
- Check at $30 with no fee: 30 × 0.60 = 18.00 − 10.80 = $7.20
Now see what happens with no minimum. A far-zone customer orders a single $9.00 loaf: it leaves 5.40 + 6.00 − 10.80 = $0.60. You barely cover the trip, and that drive took time you could have spent on two near-zone drops.
What you tell customers ends up as: "Delivery $3.50 nearby, $6 further out. Minimum order $18. Free delivery from $25 nearby and $30 further out." Two loaves clear the minimum anywhere.
Free delivery: when it pays
Free delivery sells. It also costs you on every order that uses it. The formula tells you the order value at which the food alone pays for it. Setting the threshold lower means giving away part of your profit. That is fine as a deliberate choice, say for a launch month to win new customers. What does not work is offering it without knowing what it costs.
One useful side effect: the threshold pulls orders up. Someone with $22 in the basket who sees "free delivery from $25" will often add a cinnamon bun. Check after a month whether your average order went up; if it did not, the threshold is only costing you.
If you sell through delivery apps
On apps, the customer fee and the minimum are often set by the app or by your contract. What you control is the price of each item, and that price has to cover the commission. The delivery app price tool gives you the price that keeps your margin after commission. And if you are deciding between the app and your own driver, the guide on own delivery vs apps compares the cost per order of each.
On your own channels you set the rules. The guide on selling through WhatsApp and Instagram shows how to organise those orders so the minimum and the zones are clear from the first message.
Check the numbers every month
Per-order costs move: fuel goes up, your courier changes their rate, you switch boxes. Each month, look at three things: the average cost per order in each zone, how many orders landed near the minimum, and how many used free delivery. If lots of orders land just over the threshold, it is working. If almost nobody reaches the minimum, it may be too high for what your products sell for.
Do it with the calculator
Load your products into the food cost calculator to see what each dollar of food leaves you; with that number, your cost per order and the profit you want, run the two formulas above for each zone.
Frequently asked questions
What should my minimum order be?
The order value at which the food's contribution, plus the fee you charge, pays for the order's costs and leaves the profit you want. It comes from your own numbers, not from copying another bakery or restaurant.
Is free delivery worth offering?
Only above the order value where the food alone pays the full delivery cost and still leaves a profit. Below that value, free delivery comes out of your pocket on every order.
What if a regular orders below the minimum?
You can accept it with a higher fee, bundle it with other orders in their area, or offer collection. What matters is knowing what you make or lose on that order before you decide.
Can I set my own minimum on delivery apps?
It depends on the app and your contract. Often the app controls the customer fee. What you always control is the price of each item, and that price has to absorb the commission.