Whether your own delivery operation pays isn't decided by order count but by order density. Twenty orders in one neighbourhood are profitable; the same twenty spread across a valley almost never are. One number — drops per hour — determines everything else.

The number that matters

Work out cost per drop before you buy a vehicle. The formula is simple:

Cost per drop = (driver hourly cost ÷ drops per hour) + vehicle cost per drop

An example in round numbers: at a fully loaded hourly cost of €25 and four drops an hour, that's €6.25 of labour per delivery. Add vehicle, fuel, insurance and depreciation and you reach €8–10 per drop quickly.

At six drops an hour, labour falls to just over €4. Same route, same fixed costs — just denser. Which is why tightening the delivery area is the strongest lever you have, and raising prices the weakest.

The other side of the calculation: compare cost per drop against the gross margin of the average online basket, not its revenue. At 25% gross margin, an €80 basket contributes around €20. From that, subtract picking, packaging, payment fees and the delivery itself. What's left is your profit per order.

Density beats everything

The practical consequences of the arithmetic above:

  • Keep the delivery area small. A tight radius with many customers beats a wide one with few. Too large an area is the most common reason delivery loses money.
  • Batch by zone. Not everywhere every day, but fixed days per zone. That doubles density without winning a single new customer.
  • Set a minimum order value. It prevents drops that can never cover their own cost.
  • Automate route planning. Beyond roughly ten drops, a hand-sorted route is reliably worse than a calculated one.

Time windows: narrow is expensive

A one-hour window sounds like good service and is the most expensive thing in your planning: it constrains drop order so heavily that the route gets longer. A two- or three-hour window gives the planner room and cuts cost per drop noticeably.

A good compromise is to offer few wide windows, then message a tighter arrival time on the delivery day once the route is calculated. The customer gets reliability without you having promised it in advance.

When nobody is home

The missed handover is the single most expensive event in delivery: the journey is paid for, the goods may be lost, and the customer is unhappy. Set the rule in advance — safe-place authority, leave with a neighbour, second attempt for a fee — and communicate it at the point of ordering, not when it goes wrong.

The most effective way to avoid the problem is not to require presence at all. A refrigerated collection locker takes the order and the customer retrieves it with a code whenever they like. It costs a fraction of a delivery fleet and never needs a second journey.

When it pays

Check these four before investing:

  1. Can you reach at least four to five drops per hour? If not, your area is too big or too thinly populated.
  2. Is the average basket high enough? The gross margin has to carry both picking and delivery.
  3. Is picking fast enough? Anyone spending 30 minutes per order has lost the money before the van leaves. See Selling groceries online.
  4. Have you proven the demand? If not, settle that first with click & collect, which answers the same question with no vehicle costs.

Where delivery sits in the overall cost picture is covered in What does a grocery e-commerce platform cost?

Frequently asked questions

What does a grocery delivery cost per order?
Typically between roughly €5 and €12 per drop, depending almost entirely on density. At four drops an hour it's about double what it is at eight. Recalculate it with your own hourly cost and vehicle costs rather than relying on industry averages.
Should I offer free delivery?
Free delivery raises order frequency and simultaneously lowers the average basket, because it makes small orders attractive — precisely the ones that don't pay. A minimum order value with free delivery above it pulls in the right direction on both counts.
Own vehicle or a third-party courier?
A courier converts fixed costs into variable ones and is almost always cheaper at low or fluctuating volume. In exchange you hand over the doorstep customer contact and depend on the provider for chilling requirements. With steady, dense demand the arithmetic tips toward your own vehicle.
How large should the delivery area be?
Smaller than feels right. Start with the area where your existing customers live and expand only once drops per hour hold up. An expansion that reduces density raises revenue and lowers profit at the same time.