Pricing delivery to cover true costs

A delivery fee should reflect the full fulfilment burden without hiding costs or pretending that every address is equally expensive. Use representative journeys and baskets, then choose the simplest transparent model that protects contribution.

Measure the delivery burden

• Driver or platform cost
• Employer cost where applicable
• Travel and return time
• Waiting at the kitchen and address
• Packaging and transport equipment
• Insurance, maintenance and administration
• Failed delivery, redelivery and refund allowance
• Peak and weather risk

Calculate by representative order

Build scenarios for near, normal and outer-zone addresses, small and typical baskets, peak and off-peak service. Subtract food, packaging, payment and delivery cost from net sales. Do not use average distance alone; access, parking, density and return journey can matter more.

Choose a pricing model

Show charges clearly

Customers should understand the delivery charge, minimum and unavoidable fees before committing. Do not reveal a compulsory fee only after items are selected. If the exact amount depends on address, explain the calculation and show it promptly after address entry.

Review operational alternatives

Price is not the only control. Reduce zones, change slots, improve density, adjust the menu or use third-party capacity where appropriate. A high fee cannot make an unsafe or consistently late route viable.

Practical next step

Take 30 recent deliveries and calculate full cost by journey group. Compare a flat fee, three-zone model and minimum-order model, then select the simplest option that remains viable under a conservative scenario.

Include capacity and density effects

The cost of a delivery is not independent of the rest of the shift. Two compatible orders may share part of a route, while one distant order can remove a driver from the system during the busiest period. Build a density view by zone and time, and test whether the fee still works when orders are sparse.

Control boundary and address errors

Test full postcodes, new developments, flats, gated sites and addresses close to a zone boundary. Define how staff handle a customer who is quoted the wrong price or whose address cannot be validated. Manual overrides should be logged and reviewed, not used as a permanent workaround.

Review after cost changes

Recalculate after wage, insurance, fuel, platform, packaging or failure-rate changes. Keep a decision record showing the model version and effective date. Do not copy competitor fees without knowing their driver model, menu margin or delivery coverage.

Check customer and staff handling

Provide a short explanation for support staff and a consistent route for quoted-price errors. Drivers should not negotiate charges at the door. Review whether changes create more cash handling, cancellations or unsafe pressure to complete marginal routes.

Related guides

• Business Planning and Finance — the main guide for the wider topic.
• Pricing and Margin Management — the broader guide that frames this implementation.
• Dynamic pricing for peak periods — a closely related operational control to review alongside this page.
• Service charge models — a closely related operational control to review alongside this page.

Sources and date checked

Guidance checked: 24 July 2026. Recheck official guidance, local requirements and supplier documentation before changing a live operation.

• CMA: price transparency guidance
• HSE: planning work journeys