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Methodology

Delivery App Commission Profit Planner methodology

Reconcile gross delivery-channel sales with user-entered commission, order fees and operating costs, then test contribution and target recovery.
Duc Nguyen X.By Duc Nguyen X.· Founder, Margin101Last reviewed: View update historyMethodology

Educational only: Business decision support, not accounting, tax or legal advice.

Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral small-business planning using your own assumptions.

1. Formulas and units

Percentage commission
percentageCommissionExTax = gross sales × commission rate

Where

commissionRate
Percentage commission (decimal fraction of gross channel sales charged as commission)Source: User assumption
percentageCommissionExTax
Percentage commission (currency units, ex tax)Source: Calculated output
Fixed commission fees
fixedCommissionFeesExTax = orders × fixed fee per order

Where

fixedFeePerOrderExTax
Fixed fee per order (currency units/order, ex tax)Source: Business record
fixedCommissionFeesExTax
Fixed commission fees (currency units, ex tax)Source: Calculated output
Total channel fees
totalChannelFeesExTax = percentage commission + fixed commission fees

Where

commissionRate
Percentage commission (decimal fraction of gross channel sales charged as commission)Source: User assumption
percentageCommissionExTax
Percentage commission (currency units, ex tax)Source: Calculated output
fixedCommissionFeesExTax
Fixed commission fees (currency units, ex tax)Source: Calculated output
totalChannelFeesExTax
Total channel fees (currency units, ex tax)Source: Calculated output
Retained channel revenue
retainedRevenueExTax = gross sales − total channel fees

Where

grossChannelSalesExTax
Gross channel sales (currency units/channel period, ex tax)Source: Business record
totalChannelFeesExTax
Total channel fees (currency units, ex tax)Source: Calculated output
retainedRevenueExTax
Retained channel revenue (currency units, ex tax)Source: Calculated output
Total channel cost
totalChannelCostExTax = sum of channel fees and entered operating costs

Where

totalChannelFeesExTax
Total channel fees (currency units, ex tax)Source: Calculated output
totalChannelCostExTax
Total channel cost (currency units, ex tax)Source: Calculated output
Channel contribution
contributionExTax = gross sales − total channel cost

Where

grossChannelSalesExTax
Gross channel sales (currency units/channel period, ex tax)Source: Business record
totalChannelCostExTax
Total channel cost (currency units, ex tax)Source: Calculated output
contributionExTax
Channel contribution (currency units, ex tax)Source: Calculated output
Contribution per order
contributionPerOrderExTax = channel contribution ÷ orders

Where

orderCount
Channel orders (whole orders/period)Source: Business record
contributionExTax
Channel contribution (currency units, ex tax)Source: Calculated output
contributionPerOrderExTax
Contribution per order (currency units, ex tax)Source: Calculated output
Contribution rate
contributionRate = channel contribution ÷ gross sales

Where

grossChannelSalesExTax
Gross channel sales (currency units/channel period, ex tax)Source: Business record
contributionExTax
Channel contribution (currency units, ex tax)Source: Calculated output
contributionRate
Contribution rate (decimal rate)Source: Calculated output
Required gross sales for target
requiredGrossSalesForTargetExTax = fixed and operating costs ÷ retained target contribution share

Where

contributionExTax
Channel contribution (currency units, ex tax)Source: Calculated output
requiredGrossSalesForTargetExTax
Required gross sales for target (currency units, ex tax)Source: Calculated output
Required average price per order for target
requiredAveragePricePerOrderForTargetExTax = required gross sales ÷ orders

Where

requiredGrossSalesForTargetExTax
Required gross sales for target (currency units, ex tax)Source: Calculated output
requiredAveragePricePerOrderForTargetExTax
Required average price per order for target (currency units, ex tax)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

2. Worked example

Input assumptions

The rows below come directly from the exact engine using the visible default fixture.

Gross channel sales
10,000 currency units/channel period, ex tax
Channel orders
100 whole orders/period
Percentage commission
0.3 decimal fraction of gross channel sales charged as commission
Fixed fee per order
0 currency units/order, ex tax
Product cost
3,000 currency units/channel period, ex tax
Packaging cost
500 currency units/channel period, ex tax
Incremental labour cost
1,000 currency units/channel period, ex tax
Payment and marketing cost
0 currency units/channel period, ex tax
Other channel cost
200 currency units/channel period, ex tax
Target contribution rate
0.3 decimal fraction of gross channel sales retained as contribution

Calculation and outputs

  1. Percentage commission

    percentageCommissionExTax = gross sales × commission rate
    Gross channel sales
    10,000 currency units/channel period, ex tax
    Percentage commission
    0.3 decimal fraction of gross channel sales charged as commission
    Target contribution rate
    0.3 decimal fraction of gross channel sales retained as contribution
    Fixed commission fees
    0 money
    Contribution rate
    0.23 percent
    Required gross sales for target
    11,750 money

    Engine result: 3,000 money

  2. Fixed commission fees

    fixedCommissionFeesExTax = orders × fixed fee per order
    Channel orders
    100 whole orders/period
    Fixed fee per order
    0 currency units/order, ex tax
    Contribution per order
    23 money
    Required average price per order for target
    117.5 money

    Engine result: 0 money

  3. Total channel fees

    totalChannelFeesExTax = percentage commission + fixed commission fees
    Percentage commission
    0.3 decimal fraction of gross channel sales charged as commission
    Fixed fee per order
    0 currency units/order, ex tax
    Percentage commission
    3,000 money
    Fixed commission fees
    0 money

    Engine result: 3,000 money

  4. Retained channel revenue

    retainedRevenueExTax = gross sales − total channel fees
    Gross channel sales
    10,000 currency units/channel period, ex tax
    Channel orders
    100 whole orders/period
    Other channel cost
    200 currency units/channel period, ex tax
    Fixed commission fees
    0 money
    Total channel fees
    3,000 money
    Total channel cost
    7,700 money
    Channel contribution
    2,300 money
    Required gross sales for target
    11,750 money

    Engine result: 7,000 money

  5. Total channel cost

    totalChannelCostExTax = sum of channel fees and entered operating costs
    Gross channel sales
    10,000 currency units/channel period, ex tax
    Channel orders
    100 whole orders/period
    Other channel cost
    200 currency units/channel period, ex tax
    Fixed commission fees
    0 money
    Total channel fees
    3,000 money
    Retained channel revenue
    7,000 money
    Channel contribution
    2,300 money

    Engine result: 7,700 money

  6. Channel contribution

    contributionExTax = gross sales − total channel cost
    Gross channel sales
    10,000 currency units/channel period, ex tax
    Channel orders
    100 whole orders/period
    Product cost
    3,000 currency units/channel period, ex tax
    Packaging cost
    500 currency units/channel period, ex tax
    Incremental labour cost
    1,000 currency units/channel period, ex tax
    Payment and marketing cost
    0 currency units/channel period, ex tax
    Other channel cost
    200 currency units/channel period, ex tax
    Total channel fees
    3,000 money
    Retained channel revenue
    7,000 money
    Total channel cost
    7,700 money
    Required gross sales for target
    11,750 money

    Engine result: 2,300 money

  7. Contribution per order

    contributionPerOrderExTax = channel contribution ÷ orders
    Gross channel sales
    10,000 currency units/channel period, ex tax
    Channel orders
    100 whole orders/period
    Other channel cost
    200 currency units/channel period, ex tax
    Target contribution rate
    0.3 decimal fraction of gross channel sales retained as contribution
    Total channel fees
    3,000 money
    Retained channel revenue
    7,000 money
    Total channel cost
    7,700 money
    Channel contribution
    2,300 money
    Contribution rate
    0.23 percent

    Engine result: 23 money

  8. Contribution rate

    contributionRate = channel contribution ÷ gross sales
    Gross channel sales
    10,000 currency units/channel period, ex tax
    Channel orders
    100 whole orders/period
    Other channel cost
    200 currency units/channel period, ex tax
    Target contribution rate
    0.3 decimal fraction of gross channel sales retained as contribution
    Total channel fees
    3,000 money
    Retained channel revenue
    7,000 money
    Total channel cost
    7,700 money
    Channel contribution
    2,300 money
    Contribution per order
    23 money
    Required gross sales for target
    11,750 money

    Engine result: 0.23 percent

  9. Required gross sales for target

    requiredGrossSalesForTargetExTax = fixed and operating costs ÷ retained target contribution share
    Fixed fee per order
    0 currency units/order, ex tax
    Target contribution rate
    0.3 decimal fraction of gross channel sales retained as contribution
    Fixed commission fees
    0 money
    Retained channel revenue
    7,000 money
    Channel contribution
    2,300 money
    Contribution per order
    23 money
    Contribution rate
    0.23 percent
    Required average price per order for target
    117.5 money

    Engine result: 11,750 money

  10. Required average price per order for target

    requiredAveragePricePerOrderForTargetExTax = required gross sales ÷ orders
    Gross channel sales
    10,000 currency units/channel period, ex tax
    Channel orders
    100 whole orders/period
    Required gross sales for target
    11,750 money

    Engine result: 117.5 money

Example

The rows below come directly from the exact engine using the visible default fixture.

Percentage commission
3,000.00
Fixed commission fees
0.00
Total channel fees
3,000.00
Retained channel revenue
7,000.00
Total channel cost
7,700.00
Channel contribution
2,300.00
Contribution per order
23.00
Contribution rate
23%
Required gross sales for target
11,750.00
Required average price per order for target
117.50

The exact engine-derived outputs are shown in the labelled rows below.

Interpretation

The result uses only the commercial terms entered and does not represent a default or current provider fee schedule.

3. Validation and boundary checks

  • All values must be finite and remain inside visible input boundaries.
  • Rates must remain below the engine-owned upper boundary.
  • The same cost must not be entered in more than one category.
Gross channel sales minimum
grossChannelSalesExTax ≥ 0 currency units/channel period, ex tax — A lower value is rejected before calculation.
Gross channel sales maximum
grossChannelSalesExTax ≤ 10,000,000 currency units/channel period, ex tax — A higher value is rejected before calculation.
Channel orders minimum
orderCount ≥ 1 whole orders/period — A lower value is rejected before calculation.
Channel orders maximum
orderCount ≤ 100,000,000 whole orders/period — A higher value is rejected before calculation.
Percentage commission minimum
commissionRate ≥ 0 decimal fraction of gross channel sales charged as commission — A lower value is rejected before calculation.
Percentage commission maximum
commissionRate ≤ 1 decimal fraction of gross channel sales charged as commission — A higher value is rejected before calculation.
Fixed fee per order minimum
fixedFeePerOrderExTax ≥ 0 currency units/order, ex tax — A lower value is rejected before calculation.
Fixed fee per order maximum
fixedFeePerOrderExTax ≤ 10,000,000 currency units/order, ex tax — A higher value is rejected before calculation.
Product cost minimum
productCostExTax ≥ 0 currency units/channel period, ex tax — A lower value is rejected before calculation.
Product cost maximum
productCostExTax ≤ 10,000,000 currency units/channel period, ex tax — A higher value is rejected before calculation.
Packaging cost minimum
packagingCostExTax ≥ 0 currency units/channel period, ex tax — A lower value is rejected before calculation.
Packaging cost maximum
packagingCostExTax ≤ 10,000,000 currency units/channel period, ex tax — A higher value is rejected before calculation.
Incremental labour cost minimum
incrementalLabourCostExTax ≥ 0 currency units/channel period, ex tax — A lower value is rejected before calculation.
Incremental labour cost maximum
incrementalLabourCostExTax ≤ 10,000,000 currency units/channel period, ex tax — A higher value is rejected before calculation.
Payment and marketing cost minimum
paymentMarketingCostExTax ≥ 0 currency units/channel period, ex tax — A lower value is rejected before calculation.
Payment and marketing cost maximum
paymentMarketingCostExTax ≤ 10,000,000 currency units/channel period, ex tax — A higher value is rejected before calculation.
Other channel cost minimum
otherChannelCostExTax ≥ 0 currency units/channel period, ex tax — A lower value is rejected before calculation.
Other channel cost maximum
otherChannelCostExTax ≤ 10,000,000 currency units/channel period, ex tax — A higher value is rejected before calculation.
Target contribution rate minimum
targetContributionRate ≥ 0 decimal fraction of gross channel sales retained as contribution — A lower value is rejected before calculation.
Target contribution rate maximum
targetContributionRate ≤ 1 decimal fraction of gross channel sales retained as contribution — A higher value is rejected before calculation.

4. Assumptions and source classification

  • All commercial terms, costs, rates and volumes are supplied by the user.
  • Money values use one consistent ex-tax basis.
  • No provider fee, jurisdiction, benchmark or demand forecast is embedded.
  • Raw engine precision is retained until display.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

5. Limitations

  • Results depend on the completeness and classification of entered records.
  • The planner does not forecast demand, customer behaviour or supplier terms.
  • This is educational business decision support rather than accounting, tax, legal or financial advice.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

Change history

  1. : Initial public release of the planner and methodology after pre-launch calculation, content, source and interaction review.

Related reading

Guides to interpret the decision and its assumptions.

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