For restaurants that rely on delivery, selling more through apps does not always mean increasing profitability. Fees charged by platforms, packaging costs, labor, and other operating expenses can significantly reduce a business’s margins. To help entrepreneurs visualize this impact, CloudKitchens developed a calculator that estimates how much of the revenue generated through delivery is consumed by costs associated with the channel.
Designed primarily for small restaurants and entrepreneurs considering investing in delivery, the tool allows users to enter information such as monthly revenue, average order value, the share of sales coming from delivery, dine-in, and pickup, as well as the rate negotiated with delivery platforms. Based on this data, the CloudKitchens calculator estimates the impact of delivery on the operation and presents the so-called “delivery drain,” an indicator that represents the amount paid to delivery platforms in fees over a given period.
“The main goal is to give operators a practical way to visualize the future of their business when it depends on delivery apps. Restaurants often look at the revenue generated through delivery but cannot clearly see how much of that amount is being consumed by the costs associated with the channel,” explains CloudKitchens.
Delivery can affect different parts of the operation
The tool was developed based on market and industry research and data, incorporating benchmarks for food costs, labor, occupancy, packaging, platform fees, and the market share of major delivery apps. The analysis is particularly relevant for businesses that combine different service models within the same kitchen.
According to CloudKitchens, operations that attempt to serve dine-in, pickup, and delivery customers simultaneously may face additional capacity and organizational challenges. When demand from one channel grows without the kitchen being prepared to handle it, increased sales can be accompanied by delays, a decline in the customer experience, and pressure on margins.
The calculator is part of CloudKitchens’ strategy to provide practical content and tools for industry operators. By turning market data into an accessible analysis, the company aims to help entrepreneurs better understand the relationship between revenue, sales channels, and costs and, based on that understanding, make more informed decisions about the role of delivery in their businesses.
