How to Assess Delivery-Platform Profitability for a Hospitality Venue

Delivery-platform revenue is not the same as profit. Assess the channel using reconciled net receipts and order-level contribution: sales excluding the tax treatment your accountant says to remove, less platform charges paid by the venue, venue-funded discounts, food and beverage usage, packaging, incremental labour, refunds, remakes, waste and other costs that change because the order exists.

Then consider capacity. A delivery order with positive contribution may still be unattractive if it delays higher-contribution dine-in trade during the venue’s busiest period.

Use the venue’s agreement and statements

Do not rely on a remembered commission rate or a generic industry article. Retrieve:

• current platform agreement;
• fee schedule;
• tax invoices;
• payout statements;
• promotion and advertising settings;
• menu prices by channel;
• delivery radius and operating hours;
• refund and adjustment reports;
• order-level sales data; and
• settlement bank records.

Identify each charge:

• percentage service or marketplace fee;
• order or processing fee;
• delivery-related charge paid by the venue;
• subscription;
• advertising;
• promotional placement;
• venue-funded customer discount;
• refund or complaint adjustment;
• chargeback;
• device or integration cost; and
• other contractual amount.

Fees and contracts vary. Record the exact period and agreement version used.

Confirm the accounting and GST treatment

The Australian Taxation Office provides guidance on GST and food, but individual supplies and platform arrangements can be complex. Ask the venue’s accountant or bookkeeper:

• whether the sales figure is GST-inclusive;
• which supplies are taxable or GST-free;
• how platform fees and credits are recorded;
• whether statements are acting as tax invoices;
• how discounts and refunds are treated;
• whether delivery amounts belong to the venue or platform; and
• how payouts reconcile to the accounting system.

Use one consistent basis. Do not subtract GST twice or compare GST-inclusive sales with GST-exclusive costs.

This article uses illustrative numbers only, not tax advice.

Choose a representative period

Use at least several normal trading weeks where possible. Separate:

• weekday and weekend;
• lunch and dinner;
• promotions and ordinary pricing;
• normal and unusually disrupted services;
• pickup and delivery;
• each platform; and
• new customer offers from ongoing trade.

Record closures, outages, staff shortages and major menu changes. A single festival weekend or heavily discounted launch can misrepresent normal performance.

Reconcile orders to payouts

Start with gross platform sales for completed orders. Then reconcile:

1. gross item and modifier sales;
2. taxes and amounts handled according to the accounting treatment;
3. customer discounts funded by the venue;
4. platform fees;
5. advertising and promotion;
6. refunds, remakes or adjustments;
7. other charges or credits; and
8. net amount paid.

The settlement total should match the bank deposit after timing differences. Investigate unexplained gaps, duplicate adjustments and payouts spanning periods.

A clean reconciliation prevents the profitability model from treating missing cash as a theoretical margin problem.

Calculate variable contribution

Use:

Delivery contribution = channel net sales − platform costs paid by the venue − food and beverage usage − packaging − incremental labour − refunds/remakes/waste − other order-driven costs

Decide which costs truly change with the order.

Food and beverage

Use tested recipe quantities and current purchase costs. Include sauces, garnishes and drinks. Apply actual yield, not the pack purchase price divided by an ideal serve.

Packaging

Include containers, lids, bags, labels, cups, seals, napkins and any platform-specific insert. Use a per-order or per-item basis consistently.

Incremental labour

Do not simply allocate the entire roster to delivery. Estimate extra paid time that would not be required without the channel: dedicated packer, extra cook, longer close or added prep. Confirm wages, on-costs and award treatment with payroll advice.

Refunds, remakes and waste

Include the venue-funded part, discarded food, replacement order and packaging. Avoid counting the same cost in both food usage and a full remake amount.

Other order-driven costs

Examples include integration charges, incremental merchant costs, extra cleaning, courier packaging storage or paid platform promotion. Separate fixed business overheads for later assessment.

Worked order example

Assume one order has these GST-consistent illustrative amounts:

The contribution rate is $11.50 ÷ $52.00 = 22.1%.

This is not net business profit. Rent, base management, insurance, utilities, software and other overheads still need to be covered. The example does not establish a good target for another venue.

Move from contribution to channel profit

After calculating variable contribution, identify fixed or step costs that exist because the channel operates:

• dedicated platform subscription or integration;
• device and connectivity;
• extra supervisor or pack station;
• fixed advertising commitment;
• storage space and equipment;
• additional insurance or professional fees; and
• depreciation or lease cost for channel-specific assets.

Calculate:

Channel result before shared overhead = total delivery contribution − channel-specific fixed and step costs

Then decide how the venue will consider shared overhead. Do not allocate rent or management time arbitrarily merely to make one channel look better or worse. Use an accountant-approved method and state it.

For break-even order volume:

Break-even orders = channel-specific fixed costs ÷ average contribution per order

If fixed channel costs are $1,200 per month and average contribution is $12, the simple break-even point is 100 orders before shared overhead. The calculation is only as reliable as the input period and assumes contribution remains stable as volume changes.

Use ranges when inputs are uncertain

Create low, central and high cases for food yield, refund rate, incremental labour and order volume. This shows whether the decision changes when assumptions move.

Example:

• low case: $7 contribution per order;
• central case: $12;
• high case: $15.

If the channel works only in the high case, run a controlled trial and collect better evidence before committing to advertising or equipment. Record which values are measured and which are estimates.

Include cash timing and reconciliation workload

A profitable channel can still create cash-flow and administration pressure through delayed settlements, reserves, disputed adjustments or complex invoices. Record payout frequency, reconciliation time and unresolved balances. This does not change the order contribution formula, but it affects working capital and management capacity.

Calculate contribution by item

An average can hide loss-making products.

For each high-volume item, record:

• channel selling price;
• modifiers;
• platform charges;
• discount;
• recipe usage;
• packaging;
• extra production time;
• refund or complaint rate; and
• contribution.

Compare dine-in and delivery only after using consistent treatment. A higher delivery price may offset some channel cost, but it must be displayed clearly and must not be misleading.

Remove or redesign items that travel badly, require expensive packaging, create frequent refunds or congest a critical station. A future internal-link opportunity is the Batch 3 menu-change rollout article after both destinations are published. While this draft is unpublished, use the live Café Menu Pricing guide.

Measure capacity displacement

Observe delivery performance by 15- or 30-minute interval.

• orders accepted;
• average item contribution;
• ticket time;
• delayed dine-in or pickup orders;
• refunds and complaints;
• additional staff;
• station queue;
• platform pause time; and
• sales rejected elsewhere.

If delivery orders use spare capacity, their contribution may help cover fixed costs. If they displace dine-in orders, compare the lost contribution—not just sales value.

Example: six delivery orders contribute $12 each during a peak half-hour, but the congestion causes four dine-in tables with estimated $28 contribution each to turn away or cancel. The delivery channel has not created a positive peak outcome merely because it recorded $72 contribution.

Use cautious evidence. It may be difficult to prove exactly which sales were displaced, so test changes rather than invent precision.

Assess customer acquisition separately

A platform may introduce customers who later order directly or visit. Do not assign a guessed lifetime value.

Track lawful, privacy-aware indicators:

• repeat platform customers where the platform provides aggregate data;
• use of approved first-party offers;
• direct-channel growth after platform campaigns;
• suburb and daypart reach;
• new-item trial;
• customer feedback; and
• the platform’s contractual restrictions on marketing.

Do not copy customer details from the platform into a marketing list without a lawful basis and appropriate consent.

Run scenarios

Model changes one at a time:

• fee increase;
• venue-funded discount removed;
• price adjustment;
• reduced menu;
• packaging redesign;
• minimum order where permitted;
• delivery radius change;
• shorter trading window;
• extra packer at peak;
• refund rate improvement; and
• platform pause during bottleneck periods.

For each scenario, estimate orders, sales, contribution, operational risk and customer impact. Then trial within contract and consumer-law limits and compare actual results.

Set decision rules

Examples:

• pause when ticket time or waiting food exceeds the approved limit;
• require item-level review below a venue-set contribution threshold;
• stop venue-funded promotions without an approved budget and measurement plan;
• review after any fee or contract change;
• investigate refund or remake spikes;
• remove an item that repeatedly fails travel quality; and
• reassess the whole channel quarterly or after a material change.

Thresholds must come from the venue’s economics, capacity and risk appetite. Do not copy universal labour or margin percentages.

Review contract and customer presentation

Check:

• price and mandatory fee display;
• promotion funding;
• ranking or advertising commitments;
• refund and complaint authority;
• menu parity or pricing clauses;
• data access and use;
• term, renewal and termination;
• equipment return;
• customer ownership and marketing;
• insurance and indemnity; and
• dispute process.

Obtain legal advice for material commitments or unclear terms. The ACCC explains that consumer rights cannot be removed by contract and that price displays must be clear.

Common mistakes

• Treating gross sales as profit.
• Using a headline fee instead of the actual statement.
• Mixing GST-inclusive and GST-exclusive figures.
• Ignoring venue-funded discounts and advertising.
• Using ideal food yield.
• Omitting packaging and remake costs.
• Allocating all labour or none of it.
• Looking only at weekly averages.
• Ignoring peak capacity displacement.
• Assigning an invented customer lifetime value.
• Keeping a loss-making item because it is popular.
• Failing to recheck after a fee or menu change.

Delivery-platform profitability checklist

• ☐ Retrieve current contracts, fees, invoices and statements.
• ☐ Confirm GST and accounting treatment.
• ☐ Select representative periods and separate platforms and dayparts.
• ☐ Reconcile orders, adjustments and bank payouts.
• ☐ Calculate food and beverage usage from tested recipes.
• ☐ Include complete packaging cost.
• ☐ Estimate only genuinely incremental labour.
• ☐ Include refunds, remakes, waste and order-driven costs.
• ☐ Calculate contribution by order, item, platform and daypart.
• ☐ Assess capacity displacement and service impact.
• ☐ Measure acquisition carefully without misusing customer data.
• ☐ Test pricing, menu, hours and promotion scenarios.
• ☐ Set venue-specific pause and review rules.
• ☐ Obtain accounting and contract advice before major decisions.

Take the next useful action

Download the last four normal weeks of one platform’s statements. Reconcile the payout to the bank, then calculate contribution for the five highest-selling items. Do not make a channel-wide decision until those numbers use consistent tax and cost treatment.

Use the Food Cost Percentage Calculator for recipe cost checks. The Restaurant Operations Pack provides editable controls. Read How to Calculate Food Cost Percentage for the underlying method.

General-information limitation: General operational information only, not accounting, tax, legal or financial advice. Confirm the venue’s GST treatment, deductions, platform contract, price presentation, employment costs and profitability model with qualified Australian advisers. Illustrative figures are not targets or forecasts.

References

• GST and food, Australian Taxation Office. Accessed 25 August 2026.
• Contracts, Australian Competition and Consumer Commission. Accessed 25 August 2026.
• Price displays, Australian Competition and Consumer Commission. Accessed 25 August 2026.
• Accommodation and food services industry, Australian Government. Accessed 25 August 2026.

Source review date: 25 August 2026