Why Delivery Pricing Confuses Most Restaurant Owners

Delivery has become a major revenue stream, yet many operators are not fully clear on how delivery fees work. Some platforms charge a percentage on every single order, while others offer a flat fee. The difference between these two models can change your margins, your cash flow, and your long term ability to grow.

This guide breaks down both models in simple terms and shows how each affects your business. You will also see how vGrubs creates a more predictable approach to delivery costs.

How Commission Based Delivery Actually Works

Commission based delivery is the traditional model used by major apps. Restaurants are charged a percentage of every order, often between 25 and 30 percent.

Why Restaurants Start With This Model

Many operators choose commissions at the beginning because they receive:

  • Immediate access to large customer marketplaces
  • Free top of funnel marketing
  • Built in demand without advertising
  • No fixed costs during slow weeks
  • It is a low friction entry point for new businesses that need visibility quickly.

Where Commission Costs Increase Over Time

Once volume grows, commission charges become a larger burden. Operators pay higher fees on bigger tickets, lose more revenue during busy weeks, and face additional deductions from boosts, marketing programs, and refunds. Cash flow also becomes less stable because payouts depend on the platform.

What a Flat Fee Delivery Model Really Offers

A flat fee delivery model charges a fixed amount per delivery regardless of how large the order is.

Why Restaurants Prefer Flat Fees

  • Consistent and predictable monthly expenses
  • Stable profit margins on every order
  • Easier financial planning
  • No percentage cuts on high-value orders
  • This model becomes increasingly valuable as the restaurant gains steady volume.

When Flat Fees Need Context

Restaurants with extremely low volume may feel that a flat fee is less flexible. Understanding average order frequency helps determine if this model is right for the business.

Flat Fee vs Commission: The Key Differences That Matter

Below is a simple restaurant delivery pricing comparison across the areas that impact restaurant operations most.

Cost Predictability

Commission: Fees change based on order value and promotions.

Flat Fee: Costs remain consistent every week.

Profit Retention

Commission: High order values increase cost, reducing margin.

Flat Fee: Restaurants keep more profit on every order.

Cash Flow

Commission: Payout delays and deductions disrupt revenue.

Flat Fee: Stable fees and faster payouts through vOrders improve weekly financial stability.

Customer Relationship Control

Commission: Platforms own the customer and the data.

Flat Fee: Restaurants retain ownership, with a concierge for dispute and refund handling.

When Commission-Based Platforms Still Make Sense

Commission models offer value for new operators who need immediate traffic. A restaurant entering a competitive area may rely on:

  • Marketplace level visibility
  • App-driven marketing
  • Large customer pools
  • No fixed financial commitment

This approach can help restaurants survive the first few months. The model becomes costly as order volume increases.

Which Pricing Model Supports Sustainable Growth

Both pricing systems have a role in the industry.

Commission Works Best For

  • New restaurants
  • Low order volume
  • Early menu testing

Flat Fees Work Best For

  • Restaurants with steady sales
  • Operators wanting predictable finances
  • Businesses prioritizing long-term margin stability
  • Teams managing busy delivery periods

Flat fees clearly outperform commissions once consistent volume is reached.

How vGrubs Provides a More Balanced and Predictable Approach

vGrubs combines transparent fees with tools that support restaurant growth and cost efficiency.

Transparent Pricing

All details are available on the Pricing page.

Lower Last Mile Delivery Costs

vDrive helps restaurants reduce delivery expenses.

Commission-Free Direct Ordering

vOrders protects profitability by eliminating percentage cuts.

Refund and Dispute Handling

Concierge manages disputes and revenue recovery.

Unified Operations

One streamlined system that manages orders, payouts, delivery cost control, and support.

A Simple Cost Breakdown to Show the Difference

Let’s compare a $100 delivery order under both models.

Commission Model Example

  • 30 percent fee: $30
  • refund adjustments: $5
  • marketing deductions: $5

The restaurant keeps around $60

Flat Fee Example

  • Fixed fee: $5

The restaurant keeps around $95

The takeaway is simple. Stable fees protect profit.

Why Predictable Pricing Leads to Stronger Long-Term Growth

Delivery will remain a significant revenue channel for restaurants. The pricing model you choose determines how much of that revenue you actually keep. Commission-based systems help new restaurants get started, but they become more expensive as volume rises. Flat fee systems offer stability and long-term profit protection.

If you want a delivery model that supports growth without unexpected fees, vGrubs delivers predictable pricing, better cash flow, and stronger control.

See how predictable delivery pricing improves your margins. Book a quick demo here: Schedule a Call.