How to calculate your real margin on GrabFood and foodpanda orders

Your real margin on a delivery order is calculated item by item: the price the platform pays you for the item, minus commission at your contracted rate, minus ingredient cost, minus packaging, minus any discount you fund. A single “we pay X% commission” figure can’t tell you which items make money, because commission comes off the price while your costs don’t scale with it. A low-margin item can lose money on every order while the platform as a whole still looks profitable.

Why one commission number misleads you

Commission rates vary by platform and contract. Even within one platform, the rate you pay can depend on your plan, the order type and any marketing programme you’ve joined. So the first rule: use the rates in your own merchant agreements and statements, not an industry figure you read somewhere.

The second problem is subtler. Even with the right rate, a single percentage hides how differently it hits each item:

• An item with low ingredient cost can absorb commission and still earn well.
• An item with high ingredient cost has less room, and commission can tip it to zero or below, especially once you fund a promotion.

The platform-level view averages these together. The item-level view shows you which is which.

The item-level formula

For each item, on each platform:

Delivery margin = item price received − discount you fund − commission − ingredient cost − packaging

where commission = your contracted rate × the price commission is charged on (check your agreement: some charge on the pre-discount price, some after).

A worked example

The figures below are illustrative only: hypothetical prices, costs and a hypothetical 30% contract rate chosen to show the maths. They aren’t market rates. Swap in your own.

Same menu price. Same platform. One item earns $5.80 an order; the other loses money on every one sold during the promotion. The platform statement shows neither of these numbers.

The number to compare: your break-even commission rate

Flip the maths around. For each item, work out the commission rate at which it makes exactly zero:

Break-even rate = (price after discount − ingredient cost − packaging) ÷ price after discount

• Item 1: ($16.00 − $4.80 − $0.60) ÷ $16.00 = 66%
• Item 2 (with the $3 discount): ($13.00 − $8.40 − $0.80) ÷ $13.00 = 29%

If your contracted rate is above an item’s break-even rate, that item loses money on delivery. Item 2 is only safe to promote this way on a contract below 29%.

What else to count

The formula above is a contribution margin: what each order contributes before fixed costs. To get closer to true profit, also consider:

• Platform fees beyond commission, if your contract has them (listing, marketing or payment fees)
• Refunds and adjustments charged back to you
• Prep labour for delivery-heavy items, if delivery volume changes your roster

Keep GST out of both sides so you’re comparing like with like.

What to do with the answer

• Reprice items whose delivery margin is thin. Many operators set separate delivery prices.
• Re-cost items: a smaller delivery portion or cheaper packaging can move the break-even rate.
• Don’t promote below break-even. Check every discount against the item’s break-even rate before it runs.
• Recheck when your contract changes. A new rate shifts every item’s margin at once.

If the margin problem sits in staffing rather than delivery, see what labour should cost for an F&B outlet in Singapore.

Where Backline fits

Backline calculates delivery-adjusted margin for every item, per channel, using your actual platform commission rates, not an industry average. Its pricing engine only recommends discounts that stay above a margin floor you set, and shows its reasoning before you approve anything. See delivery-adjusted margin and the pricing engine on the product page.