This tool works out what to charge on a delivery app so you keep the margin you choose after the commission, the packaging and any sales tax. If you also enter your shop price, it shows how much higher the app price ends up.
How it works
Margin is measured on the price before tax. The app's commission comes out of the price and the tax goes to the tax office, so the price has to cover all three on top of the cost.
- Divisor = 1 − margin − commission × (1 + tax rate), if the app charges its commission on the price including tax. If it charges on the price before tax, the divisor is 1 − margin − commission.
- Price before tax = cost per order ÷ divisor.
- Price on the app = price before tax × (1 + tax rate).
- You keep = price before tax − commission − cost. This equals the margin you chose.
If the divisor comes out at zero or below, no price works, and the tool tells you so instead of showing a meaningless number.
Worked example: a burger meal on a delivery app
Your burger meal sells for $11.00 at the counter. For delivery it costs you $5.20: $4.60 of food and $0.60 for the box, bag and napkins. You want a 30% margin and, say, the app charges 30%. Your prices are before tax.
| Step | Sum | Result |
|---|---|---|
| Divisor | 1 − 0.30 − 0.30 | 0.40 |
| Price on the app | 5.20 ÷ 0.40 | $13.00 |
| App commission | 13.00 × 0.30 | $3.90 |
| You keep per order | 13.00 − 3.90 − 5.20 | $3.90 |
| Above your shop price | 13.00 ÷ 11.00 − 1 | 18.2% |
Where sales tax is added to the price, the checkbox matters. Say your sales tax were 10%. With the commission charged on the price including tax, the divisor is 1 − 0.30 − 0.30 × 1.10 = 0.37 and the app price becomes $15.46. With the commission on the price before tax it would be $14.30. Read your contract before you choose. Your local tax rules decide the rate; ask an accountant if you are unsure.
What to do with the result
- If 18% higher feels like too much, try a lower margin or a dish with a better cost. Many kitchens also offer a slightly different portion or combo on the app.
- Remember what is not in here. Paid promotions, discounts the app asks you to fund and refunded orders all come out of your margin. If you have them, add an average per order to the cost.
- Compare channels. An app order and a phone order with your own driver do not leave the same money. The guide to channel profitability helps you compare them.
To understand how commissions work and what to check before joining an app, read the guide to delivery apps. If your packaging is expensive, the guide to packaging cost helps you cost it per order, and the one on payment fees covers card charges on orders you take yourself.
For the full cost of a product, with ingredients, packaging, your time and the gas, use the food cost calculator.
Frequently asked questions
Is it normal for the app price to be higher than in my shop?
It is what the commission does. If you charge the same on the app as at the counter, the commission comes out of your margin. How much you add is your decision; the tool shows the price that keeps the margin you chose.
Does the app take its commission on the price with tax or without?
It depends on your contract, so check it and tick the box to match. If the commission is taken on the price including tax, it bites a little harder and the app price has to be higher.
Why does it sometimes say no price works?
Because the margin you want plus the commission already reach 100% of the price or more. With those numbers nothing is left to pay for the food. Lower the target margin or renegotiate the commission.
Should packaging go into the cost per order?
Yes. Containers, bags, cutlery, sauce pots and labels are part of what a delivery order costs. You do not spend them on dine-in, which is why it helps to add them separately.