Third-party commission
Also called: delivery commission · delivery app fees
Third-party commission is the marketplace's cut of each delivery order — commonly 15–30% depending on the service tier. It comes off the subtotal, so it hits contribution margin directly and can turn a profitable dish into a break-even one.
Worked example · A $16 entrée on a 30% marketplace
- Menu price on the app
- $16.00
- Commission at 30%
- −$4.80
- Net revenue
- $11.20
- Plate cost
- $4.80
- Packaging
- $0.65
- Contribution margin
- $5.75 vs $10.55 in-house
The same dish contributes 45% less through the channel. Whether that's acceptable depends entirely on whether the order is incremental.
The menu-inflation question
Price to hold contribution constant
Delivery price = (Plate cost + Packaging + Target CM) ÷ (1 − Commission %)
Holding contribution flat on the dish above requires a delivery price of $22.86 — a 43% uplift. Most operators land on a partial uplift of 10–20% instead, accepting lower margin in exchange for volume and for not showing guests a price that reads as gouging.
Run the numbers
Delivery margin calculator
The guide that works it through
How to Price a Menu Item: Markup vs. Margin
The formula for pricing a dish from plate cost and target margin, the markup/margin confusion that underprices menus, and the three adjustments before a price goes on the menu.
Related terms
Contribution margin
The dollars a dish contributes to overhead and profit after its ingredient cost — menu price minus plate cost.
Menu price
The price a dish is sold at — set from plate cost, target margin, and what the dish is worth in the room.
COGS (cost of goods sold)
The cost of the food and beverage actually consumed in a period, computed from inventory rather than from purchases.
Ghost kitchen
A delivery-only kitchen with no dining room — different cost structure, different margin math.