How to analyse the margins of a local food-delivery business?
Introduction
The local food-delivery sector is experiencing sustained growth in Switzerland. Independent restaurants, dark kitchens or regional platforms: business models are multiplying. But behind the apparent attractiveness lies a demanding economic reality.
The margins of a local food-delivery business are structurally compressed. High delivery costs, technology infrastructure to maintain, expensive customer acquisition: each order must generate sufficient value to cover a complex operational chain. Unlike large platforms that rely on massive volumes, a local player must optimise every expense item.
For a potential acquirer, analysing these margins is not optional. It is the foundation of an informed decision. Understanding the revenue structure, identifying hidden costs, evaluating improvement levers: all elements that determine the viability of the business model. This guide offers you a pragmatic method to dissect the finances of a food-delivery business and identify points of attention before an acquisition. If you are looking to acquire a business in this sector, browse the companies for sale on Leez.
📌 Summary (TL;DR)
A local food-delivery business generates its revenue primarily through restaurant commissions and delivery fees. Operational costs include delivery (salaries, vehicles), technology (platform, maintenance) and marketing. Net margins often range between 5 and 15%, with optimisation levers on routes, average basket and revenue diversification. The acquirer must verify the quality of financial data, dependence on partner restaurants and the scalability of the model.
📚 Table of contents
The revenues of a local food-delivery business
A local food-delivery service generates revenue through several channels. Commission from restaurants represents the main source: between 15 and 30% of each order amount, compared to 25 to 35% for large platforms like Uber Eats or Just Eat.
Delivery fees charged to customers are added: generally 5 to 10 CHF per order. Some services also apply fixed service fees.
Concrete example: with 200 orders per week at 40 CHF average basket and 20% commission, weekly turnover reaches 1,600 CHF, approximately 83,000 CHF annually.
The operational cost structure
Understanding the cost structure is essential to analyse the margins of a food-delivery business. The main items are distributed as follows: delivery (40-50% of turnover), technology (10-15%), marketing (10-15%), and administration (5-8%).
This distribution varies according to the maturity of the business model. Services in growth phase invest more in marketing, whilst established structures optimise their delivery costs.
Delivery costs
The heaviest item in the business model. Delivery drivers' salaries vary according to status: employees (with social charges of 15-20%) or self-employed. In Switzerland, the average cost per delivery ranges between 8 and 12 CHF.
Vehicle or electric bicycle costs, maintenance, insurance and equipment are added. For 800 monthly deliveries, this item easily represents 7,200 to 9,600 CHF.
Technology and infrastructure
The digital platform (mobile application and website) requires continuous investment in development and maintenance. Cloud hosting costs remain moderate, but payment fees weigh heavily: Stripe and Twint charge 1.5 to 2.5% of turnover.
Customer support adds to the bill. Total monthly budget: between 2,000 and 5,000 CHF depending on the size and complexity of the service.
Marketing and acquisition
Acquiring new customers is expensive in the digital restaurant sector. Promotions and discounts to build loyalty represent a constant investment. Partnerships with restaurants also require sustained commercial effort.
In growth phase, allow 10 to 15% of turnover. Once the service is established, this ratio drops to 5-8%. For 32,000 CHF monthly turnover, this represents 2,400 to 4,800 CHF.
Margin calculation: a concrete example
Let's take a Swiss local food-delivery business with 800 monthly orders at 40 CHF average basket. Turnover: 32,000 CHF (restaurant commissions + delivery fees).
Deduction of costs: delivery 9,600 CHF (30%), technology 3,500 CHF (11%), marketing 3,200 CHF (10%), administration 2,000 CHF (6%). Total charges: 18,300 CHF.
Net margin: 13,700 CHF, or 43% before tax and depreciation. After all expenses, the real net margin is around 10-15%. Many services show negative margins during the first years.
Levers to improve profitability
Several concrete actions allow optimising margins without sacrificing service quality. Logistics optimisation comes first: every percentage point gained on delivery costs directly impacts the net result.
Increasing the average basket and diversifying revenue sources also offer significant opportunities. The key: test, measure and adjust progressively.
Route optimisation
Geographical grouping of deliveries drastically reduces travel time. Intelligent routing algorithms allow processing more orders per working hour.
Defining targeted delivery zones avoids unproductive journeys. Result: a reduction in costs per order of 15 to 25%. On 800 monthly deliveries, the saving reaches 1,400 to 2,400 CHF.
Increasing the average basket
A minimum order (20-25 CHF) improves profitability per transaction. Upselling suggestions (desserts, drinks) and degressive delivery fees encourage ordering more.
Concrete impact: each 5 CHF increase in average basket improves the margin by 2 to 3 percentage points. On a volume of 800 orders, this represents 640 to 960 CHF additional monthly margin.
Revenue diversification
Premium services for restaurants (highlighting in the application, detailed statistics) create a stable complementary revenue source. Customer subscriptions with free delivery build loyalty and generate predictable cash flow.
Selling anonymised data on consumption trends in the restaurant sector interests industry players. These additional revenues significantly improve the business model.
Points of attention for the acquirer
Before taking over a food-delivery business, check the dependence on a few large restaurants: excessive concentration represents a major risk. Analyse the customer retention rate: ideally above 40% per month.
Examine seasonality (typical drop in summer) and validate all contracts with delivery drivers and restaurants. The Leez valuation tool helps you estimate the value of the service.
Browse the restaurant sector businesses available to compare market opportunities.
Analysing the margins of a local food-delivery business relies on a detailed understanding of the revenue and cost structure. Revenues depend on order volume, average basket and delivery fees. Operational costs include goods purchases, delivery drivers' salaries, technology and marketing. Net margin generally ranges between 5% and 15%, depending on operational efficiency.
To improve profitability, three levers are essential: optimising delivery routes, increasing the average basket through targeted commercial strategies, and diversifying revenues via partnerships or complementary services.
If you are considering acquiring a local food-delivery business, carefully examine historical financial data, dependence on third-party platforms, and customer loyalty. These elements determine the long-term viability of the model. Discover the food-delivery businesses available on Leez and benefit from a secure infrastructure to communicate with sellers.
