Pricing & profit · 4 min read
How to price food on delivery apps so you don't lose money
Many food sellers only notice after the first payout: the price on the delivery app was raised, but the money that arrives is still less than the price in the shop. The cause is almost always how the increase is worked out. Here is the formula and some worked examples, so you only have to fill in your own numbers.
Why the same price as in your shop loses you money
Delivery apps take their commission from the price shown in the app. If an iced coffee is $5 in your shop and you list it at $5 in the app with a 20% commission, you receive only $4 per cup.
That $1 gap is often bigger than your profit on the cup. The more you sell through the app, the more you lose.
The formula: divide, don't multiply
To receive the same as your shop price, app price = shop price ÷ (1 - commission).
Example with a 20% commission: $5 ÷ 0.8 = $6.25. After the 20% is taken, you still receive $5.
The most common mistake is raising the price by 20% because the commission is 20%. $5 + 20% = $6, then 20% is taken and you get $4.80. You still lose $0.20 per item.
| Shop price | 20% commission | 25% commission | 30% commission |
|---|---|---|---|
| $4.00 | $5.00 | $5.50 | $6.00 |
| $5.00 | $6.50 | $7.00 | $7.50 |
| $6.00 | $7.50 | $8.00 | $9.00 |
If you pay for a promotion yourself
A promotion that you pay for also cuts the money you receive. If the commission is worked out on the menu price, the formula becomes: shop price ÷ (1 - commission - promotion).
Example: shop price $5, 20% commission, and a 10% promotion paid by you. $5 ÷ 0.7 = $7.14, rounded up to $7.50.
Some apps work out the commission on the price after the promotion. Then the formula is: shop price ÷ ((1 - promotion) × (1 - commission)). Check in your partner app which one applies to you.
No shop price yet? Start from your cost
If you only sell through apps, use your cost per item plus the profit you want in place of the shop price.
Example: cost $2, and you want $1.50 profit per item, so the target is $3.50. With a 20% commission, list it at $3.50 ÷ 0.8 = $4.38, rounded up to $4.50.
- Put every ingredient and all packaging into the cost, including cups, straws and bags.
- Work out the cost again every time an ingredient gets more expensive.
Use the numbers from your own partner app
Fees differ between apps, and can differ by city and by the programme you joined. Rates differ, so don't copy a number from someone else's post: look at the percentage in your own partner app or payout report, and use that.
If your report shows tax on the commission, count both as deductions. For example, a 20% commission plus 10% tax on the commission is 22% in total.
Regular customers can still order direct, with no commission
Delivery apps are good for being found by new buyers. Customers who already know your shop can be pointed to order direct, so you don't pay commission again and again on the same buyer.
With Kedaify you can make a free online store. Buyers choose from your menu on your store link, the order lands in your WhatsApp, and they pay cash, by bank transfer to you, or with your own QR payment code. Kedaify takes no commission on orders. You arrange delivery yourself: deliver it yourself, pick-up, or a courier.
- Put your store link in your Instagram bio, your WhatsApp status and on stickers on your packaging.
- Your own store prices can stay the same as your in-person prices.
Questions sellers ask
By how much do I raise my price to cover a 20% commission?
By 25%, not 20%. Divide the shop price by 0.8: $5 becomes $6.25. For other rates, divide by (1 - commission).
Can my app price be different from my shop price?
Many sellers list a higher price on the app to cover the commission. Make sure it still follows the rules of your partner app.
Does Kedaify take a commission on orders?
No. Orders from a Kedaify store arrive in your WhatsApp and are paid straight to you, in cash, by bank transfer or to your own QR payment code.
Which delivery apps does this work for?
Any of them, for example GrabFood, foodpanda, Uber Eats, DoorDash, Deliveroo or iFood. Only the commission rate changes, so use the one shown in your own app.