Buying Software

Own Ordering App or Delivery Marketplace? Do the Maths

By Mudabbir Hasan, Co-founder · Published · Last updated

Own ordering costs a card fee on each order plus a monthly platform cost. A marketplace takes a share of every order. Your saving per order is the marketplace rate times the basket, minus the card fee. Divide your monthly platform cost by that saving to get the break-even order count. Count only repeat customers you can move across, because the marketplace is also how new customers find you.

Why not just compare commission percentages?

Delivery marketplaces negotiate rates by contract, and the rate you get depends on the plan and on whether you or the platform delivers. DineOpen, which sells direct-ordering software, introduces its own ranges as "a rough guide" and notes that each app adds extra fees on top and charges commission on the whole order value. So a percentage taken from a blog is a poor input. The number that matters is the one on your own statement, and the method below works with whatever that number is.

What does one order cost on each channel?

Take a real basket. From Tooting Fish & Kebab's published menu: a Lamb Doner at £11.00, a portion of chips at £3.60 and a 330ml Coca-Cola at £1.80 come to £16.40. That basket is an illustration built from menu prices. It is not the shop's order data.

On your own app you pay the card processor. Stripe's published standard UK rate is 1.5% plus 20p for standard UK cards and 2.8% plus 20p for premium UK cards, with custom pricing for larger volumes. On £16.40 that is about £0.45 for a standard card and about £0.66 for a premium card. Any processor will have its own rates, so use yours.

On a marketplace, commission is your rate times the basket. The rates below are what-ifs to show the shape of the answer, not any platform's price:

  • At 15% commission: £2.46 on the basket, so £2.01 more than the standard card fee.
  • At 25% commission: £4.10 on the basket, so £3.65 more than the standard card fee.
  • At 30% commission: £4.92 on the basket, so £4.47 more than the standard card fee.

How many orders does it take to break even?

Divide your monthly cost of running your own channel by the saving per order. Suppose the platform, hosting, notifications and anything else you pay each month came to £200. That figure is a placeholder, so replace it with your own quote. Then you need about 100 orders a month to break even at 15%, about 55 at 25% and about 45 at 30%, on this basket.

The formula is: break-even orders per month = monthly running cost divided by (commission rate times average basket, minus card fee per order). Two inputs do most of the work: your real commission rate and your real average basket.

Break-even, with an illustrative basket

Saving per order = marketplace rate × basket − card fee

Break-even orders a month = running cost ÷ saving per order

Basket, from a published menu
£16.40
Card fee, 1.5% + 20p
≈ £0.45
At a 25% rate (a what-if)
£4.10 − £0.45 = £3.65
£200 a month (a placeholder)
≈ 55 orders
Illustrative arithmetic. Use your own rate, basket and running cost.

Which orders actually count towards the saving?

Only orders that would have happened anyway and move to your own channel. DineOpen's advice is to use the apps for discovery and to move repeat customers to direct ordering, and it describes the apps as "great for being found, expensive for loyalty". A new customer who found you on a marketplace is not a saving if you would never have met them otherwise. Count the regulars you can realistically bring across, not your total order volume.

What else belongs in the comparison?

  • Delivery. Marketplace couriers have a cost inside the fees, and your own riders have wages or fees. Compare like for like.
  • VAT. HMRC treats hot takeaway food as standard-rated, and says delivery of cooked, ready-to-eat meals falls within catering, which is standard-rated. Check whether each platform quotes its fees before or after VAT, and compare on the same basis.
  • Extra fees. Per-order, payment and promotion charges all sit on top of commission, so total them from a real statement.
  • Your time. Menu changes, refunds and rider coordination need a console you can run from a phone or laptop.

Count these on both sides

  • Who delivers, and what it costs

  • VAT: are fees quoted before or after?

  • Per-order, payment and promotion fees

  • Your own time running it

What does an own ordering system need to cover?

The Tooting Fish & Kebab build is a useful reference because it covers the whole loop from order to doorstep. According to its public case page it has three parts in one build: a customer app where people browse the menu, add to cart and check out; a rider mode where riders go online, see deliveries and navigate to the door; and a web admin console with live orders, rider assignment, revenue and order breakdowns, menu configuration and push notifications to customers and riders. It is built in Flutter and is live on the iOS App Store, with the Android release still in progress.

We have not published the shop's order figures or savings, so this article does not claim any. The case page describes what was built, and the arithmetic above is how an owner can test whether building something similar pays back for their own shop.

See the build: Tooting Fish & Kebab ordering and delivery app

Three parts in one build

  • Customer app

    Browse the menu, add to cart, check out.

  • Rider mode

    Go online, see deliveries, navigate to the door.

  • Admin console

    Live orders, rider assignment, revenue, menu, push notifications.

From the Tooting Fish & Kebab case study.

What should you do before you commission an app?

  • Pull three months of marketplace statements and note your actual commission rate and total fees.
  • Work out your average basket and how many orders come from repeat customers.
  • Get a quote for the platform, hosting and card processing, and add them into one monthly running cost.
  • Run the break-even formula on repeat orders only, at standard and premium card fees.
  • Decide how you will move regulars across, for example a direct ordering link inside the delivery bag.

If the numbers say yes, scope it before you build it. A short technical discovery settles which of the three parts you need first and what it should cost.

Mobile app development services

Sources

Related guides

Talk to an engineer about your project

Start with a free project call. We learn what you are building and recommend the right next step, with no pitch.

Book a call