Set the decision boundary before using the numbers
Inputs and records to align
- One platform contract, fee base, currency, market and effective date. (not complete)
- Net customer price and every merchant-funded promotion or refund treatment. (not complete)
- Food, packaging, payment, platform, delivery-support and incremental labour cost per order. (not complete)
- Observed or explicitly assumed incremental orders, separated from shifted direct orders. (not complete)
- Kitchen or fulfilment capacity and a displaced-contribution scenario at peak periods. (not complete)
- Settlement dates and withheld or adjusted amounts for the cash-flow view. (not complete)
Build one transparent decision model
Incremental channel contribution = incremental delivered orders × contribution per platform order - channel-specific fixed cost - displaced contribution
- incremental delivered orders
- Fulfilled platform orders above the evidenced no-channel baseline (orders per period) — business observation or labelled scenario
- contribution per platform order
- Net merchant revenue less included food, packaging, fee, refund and fulfilment cost (CU per delivered order) — settlement, recipe and operating records
- displaced contribution
- Contribution lost when constrained capacity replaces another order (CU per period) — capacity record or explicit scenario
Commission may apply to a different fee base than merchant receipts. Reconcile the actual statement before calculating and keep settlement timing outside the profit formula.
- Reconcile one settlement statement to fulfilled orders.
- Calculate net merchant revenue and contribution per delivered order.
- Separate incremental orders from direct-order substitution.
- Add channel operating cost and displaced constrained-capacity contribution.
- Stress-test fee, refund, promotion, menu-price and peak-capacity cases.
- Choose a channel rule such as limited items, dayparts or a stop threshold and review it against records.
Worked example: test 100 incremental delivery orders
Invented period: 100 incremental orders at 7 CU contribution each, 180 CU channel operating cost and 120 CU displaced contribution.
| Line | Calculation | CU |
|---|---|---|
| Order contribution | 100 × 7 | 700 |
| Channel operating cost | entered for period | (180) |
| Displaced contribution | entered capacity scenario | (120) |
| Incremental channel contribution | 700 - 180 - 120 | 400 |
| Case | Changed input | Result | Decision signal |
|---|---|---|---|
| Lower incrementality | 60 orders | 120 | Recheck shifted direct orders |
| Base | 100 orders | 400 | Validate capacity and refunds |
| Peak displacement | Displaced contribution 400 | 120 | Restrict peak availability |
Review the operational trade-offs before acting
- Applying a headline commission to the wrong fee base.
- Ignoring merchant-funded discounts, refunds, packaging or support time.
- Counting all platform orders as incremental.
- Using revenue instead of retained contribution.
- Omitting direct-channel displacement during constrained periods.
- Treating profit and settlement cash timing as the same result.
Decision questions
- Is any positive per-order contribution worth accepting?
- Not automatically. The order can displace higher contribution, consume scarce capacity or create channel fixed costs and cash timing risk.
- Should I use the platform headline fee?
- Use the current signed contract and reconciled settlement statement, including the fee base, taxes, promotions, refunds and other charges that apply to this business.
Sources and methodology
- Delivery App Commission methodology — Margin101: Product-owned order, fee-base, contribution and displacement boundaries.
- Channel Profitability Diagnostic methodology — Margin101: Incrementality, channel cost and shared-cost comparison mechanics.
Test the editable scenario
- Delivery App Commission Profit Planner
Set channel prices after commission, packaging and incremental labour
- Restaurant Menu Profitability Planner
Choose menu items and pricing from item-level contribution, popularity and operational burden
- Channel Profitability Diagnostic
Diagnose channel profitability after all channel costs