A useful delivery minimum is the smallest food basket that covers the variable costs of fulfilling an order and leaves the contribution you want. Start with the cost of the area you serve, calculate what remains at several basket sizes, and round the resulting threshold to a practical amount.
For the hypothetical example below, a $20 minimum leaves $5.90 per order after the listed variable costs. That clears a $5 contribution target. It does not mean the restaurant earns $5.90 in profit: rent, subscriptions, and other fixed costs still need to be paid.
Find the cost of fulfilling one delivery
Choose the delivery area first. A minimum that works for nearby addresses may not support a longer trip. If dispatch prices differ by distance, calculate each zone separately rather than averaging every delivery together.
List the costs that arise when you accept an order. Some change with the basket value; others are charged per order even when the basket is small. A fixed dispatch charge in this calculation is fixed per delivery, not a monthly overhead cost.
- Food and ingredients: Estimate the share of food sales consumed by ingredients, including the mix of items customers actually order for delivery.
- Packaging: Include containers, bags, seals, napkins, and other supplies used for a typical order. If large orders need more packaging, account for that at larger basket sizes.
- Payment processing: Include both the percentage and any per-transaction amount in your quote. Check which charges are included in the amount processed.
- Dispatch: Include the restaurant's cost to get the order to the customer. Ask how distance, busy periods, tips, failed deliveries, and other exceptions affect the quote.
- Other order-dependent costs: Add any labor, commissions, or service charges that increase because an order is placed. Do not add a cost twice if it is already included elsewhere.
Separate these from monthly fixed costs such as rent and a base software subscription. The contribution left by each order helps pay those bills, but subtracting the full monthly bill from every order would distort the minimum. If your target needs to cover fixed costs as well, set the target with those costs in mind.
Calculate contribution at several basket values
Use the following hypothetical assumptions for one delivery zone. Food costs 30% of the food basket. Payment processing costs 3% of the basket plus $0.30 per transaction. Packaging costs $1.20 per order, and dispatch costs $6.00 per order. The restaurant charges no delivery fee. The desired contribution after these variable costs is $5.00 per order.
This example includes the stated variable costs and the per-order dispatch charge. It excludes monthly fixed costs and exception costs such as refunds or failed deliveries. Sales are food basket values, not profit. Actual costs and targets will differ.
| Food basket | Food cost | Other variable costs | Contribution |
|---|---|---|---|
| $15.00 | $4.50 | $7.95 | $2.55 |
| $20.00 | $6.00 | $8.10 | $5.90 |
| $25.00 | $7.50 | $8.25 | $9.25 |
The other-cost column combines packaging, dispatch, and processing. For example, processing on the $20 basket is $0.90: $0.60 plus $0.30. Adding $1.20 packaging and $6.00 dispatch gives $8.10. Subtract that and the $6.00 food cost from $20.00 to get $5.90.
You can find the exact starting threshold with a formula. After the 30% food cost and 3% processing percentage, 67 cents of each basket dollar remain. The fixed per-order amounts total $7.50: $6.00 dispatch, $1.20 packaging, and $0.30 processing. To leave $5.00, the basket must produce at least $12.50 after percentage costs.
Minimum basket = ($5.00 target + $7.50 per-order costs) ÷ 0.67 = $18.66, rounded up to the next cent.
At $18.65, the contribution is just below $5.00 before rounding. A $20 minimum gives some room above the calculated threshold under these assumptions. It is a starting decision, not a guarantee: an expensive item mix, extra packaging, or a dispatch surcharge can reduce what remains.
Choose a minimum and compare alternatives
A minimum and a delivery charge solve different parts of the problem. A minimum determines whether a basket is eligible. A delivery charge adds to the guest's cost on an eligible order and can offset some delivery expense. Before changing either, look at the total a customer sees and the contribution the restaurant keeps.
Keep the area and use a $20 minimum
In the example, a $20 food basket leaves $5.90 before fixed and exception costs. A guest with a $15 basket would need to add $5 of food or choose another option. That may encourage a larger order, but some guests may leave instead. Count both outcomes before assuming the higher basket helps.
Add a delivery charge
Using the same assumptions, suppose the guest pays a $2.00 delivery charge on a $20 food basket, and processing applies to the full $22.00 payment. Processing becomes $0.96. After $6.00 food, $1.20 packaging, $6.00 dispatch, and $0.96 processing, the restaurant retains $7.84. The guest pays $22.00 before any other charges.
That is $1.94 more contribution than without the delivery charge, not the full $2.00, because processing also applies to the charge in this example. A real quote may calculate fees differently. Ask whether processing applies to delivery charges, tips, and other amounts, then use the terms that apply to your orders.
Serve a smaller area
Alternatively, suppose a smaller zone reduces dispatch from $6.00 to $4.00, with all other original assumptions unchanged and no guest delivery charge. The per-order amounts become $5.50. The minimum basket for the $5.00 target is then $15.68, rounded up to the next cent: ($5.00 + $5.50) ÷ 0.67.
A smaller zone can support a lower minimum in this example, but it also excludes some addresses. Compare the orders and contribution you might retain near the restaurant with the demand you might lose farther away. Do not assume every excluded guest will order pickup or travel to the restaurant.
Review lost demand and exceptions
Before setting a minimum, review recent delivery baskets by area and time of day. Count how many fall below the proposed threshold and how far below they are. A guest who is $1 short faces a different decision from someone whose basket is $8 short. Check whether practical add-ons are available without encouraging customers to buy more than they want.
Track the outcome after a change. Look at eligible orders, basket values, contribution after variable costs, and attempted orders that do not reach checkout or completion where your tools can show them. An abandoned attempt is not necessarily a lost sale: the guest may return later or choose pickup. Use it as a signal to investigate, not as proof of the reason for leaving.
Review distance bands separately. If the outer area has higher dispatch costs, consider a different minimum, a delivery charge, or a smaller boundary. Ask your ordering provider which zone rules and charges can be configured, and what the guest sees before checkout. Do not assume the same rules are available in every ordering setup.
Also record exceptions outside the base calculation: refunds, remakes, failed deliveries, and dispatch surcharges. If they occur regularly, estimate their average cost per order and add it to the next calculation. Occasional costs still matter, but a base-case result should not be presented as though it includes them.
Check that the rule is clear wherever customers start an order. Your restaurant website should help guests understand the delivery area and any minimum before they spend time building a basket. For more on the ordering journey, see the online ordering guide. If you also use marketplaces, the guide to comparing order contribution can help you keep the channels' costs distinct.
Next, calculate one zone using your own ingredient, packaging, processing, and dispatch costs. Then review Fleksa's restaurant online ordering and request a demonstration if it fits your restaurant. Ask how you would set your chosen minimum, delivery area, and guest-facing charges.
Frequently asked questions
Should a delivery minimum include the delivery charge?
Decide whether the threshold applies to food value or the total payment, then make that rule clear to guests. A food-basket minimum measures the amount available to cover food-related costs; a separate delivery charge can offset dispatch expense. Check how your ordering setup applies the rule.
What if dispatch costs change by distance?
Calculate the threshold for each meaningful distance band using its own dispatch cost. Then compare separate minimums, delivery charges, or a smaller area. Include surcharges and exceptions when they are frequent enough to affect the decision.
Does meeting the minimum mean an order is profitable?
Not necessarily. The calculation shows contribution after the costs included in it. That contribution must still help cover fixed costs and any excluded exceptions. Review the target and cost assumptions as your order mix and expenses change.
