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Delivery is one of the easiest ways for farms and food businesses to grow revenue. It is also one of the easiest ways to quietly lose money.
Fuel, labor, packaging, vehicle wear, and admin time all add up quickly. If you don’t calculate your delivery costs properly, you risk underpricing your service and eroding your margins without realizing it.
This guide shows you exactly how to calculate food delivery costs step-by-step, including total delivery cost, cost per delivery, cost per order, and how much you should charge customers for food delivery.
Whether you run a small CSA, a food hub, a food co-op, or a direct-to-consumer farm, the formulas below will help you build profitable delivery into your operation.
Most farms and food businesses underestimate delivery costs because they only think about gas and time on the road. In reality, delivery includes several cost categories.
If you ignore even a few of these, your delivery pricing will almost always be too low.
Read more about pickup vs delivery: which is best for a farm?
Understanding fixed and variable delivery costs makes farm delivery pricing much easier.
These stay the same regardless of how many orders you deliver. Fixed delivery costs include:
These increase with every delivery. Variable delivery costs include:
Profitable delivery pricing needs to cover both.
Before jumping into the steps to calculate delivery costs for food, here are the core formulas.
This formula shows your complete delivery cost over a given period, usually per week or per month.
Total delivery cost = Driver labor + Fuel + Insurance + Vehicle depreciation + Maintenance + Packaging + Admin overhead
This number represents the true cost of operating your delivery system, not just what you spend on gas.
This formula shows how much each delivery actually costs your business.
Cost per delivery = Total delivery cost ÷ Number of deliveries
This is the most useful metric for pricing flat delivery fees or comparing different delivery routes and zones.
This formula shows the delivery cost assigned to each individual order.
Cost per order = Total delivery cost ÷ Total orders delivered
This is especially helpful for food hubs and farms that deliver multiple orders to the same location or route.
Download our FREE guide to achieving profitable delivery for your farm business
Driver labor is usually the biggest delivery expense.
This includes:
Even if you deliver the orders yourself, your time still has a real cost.
A farm delivers three days per week. Each delivery day takes 6 hours.
That is:
6 hours × 3 days = 18 hours per week
If the driver cost is $30 per hour:
$30 × 18 hours = $540 per week in labor
Fuel is best calculated as a cost per delivery day or cost per kilometer.
The simplest method to calculate fuel costs for deliveries:
Fuel cost for the day: $75
Hours on the road: 6
Fuel cost per hour: $75 ÷ 6 = $12.50 per hour
Over a week: $12.50 × 18 hours = $225
Take your annual insurance and convert it to hourly or per-delivery cost.
Annual insurance: $3,000
Monthly: $250
Monthly delivery hours: 72
Hourly insurance cost: $250 ÷ 72 = $3.47 per hour
Every delivery reduces the resale value of your vehicle.
A simple rule is to use 15 percent annual depreciation.
Vehicle value: $50,000
Annual depreciation: 15 percent
Annual depreciation cost: $7,500
Monthly: $625
Hourly depreciation: $625 ÷ 72 = $8.68 per hour
This is one of the most overlooked delivery costs.
Include:
Track your maintenance spend over the year and divide monthly.
Annual maintenance: $3,600
Monthly: $300
Hourly maintenance: $300 ÷ 72 = $4.17 per hour
Food delivery requires real materials.
Typical delivery packaging costs include:
These should be counted per order or per delivery day.
Average packaging cost per order: $2
Orders per week: 60
Weekly packaging cost: $120
This includes time spent on:
If delivery takes 3 admin hours per week at $25 per hour:
$75 per week in admin overhead
Now combine everything.
Total weekly delivery cost: $1,253
If the farm completes 36 deliveries per week:
Cost per delivery: $1,253 ÷ 36 = $34.80
If each delivery contains an average of 2 orders:
Cost per order: $1,253 ÷ 72 = $17.40
This is the real number you should use for pricing
Most farms undercharge because they base pricing on competitors instead of real costs.
A simple rule: Delivery fees should be at least 1.3 to 1.5 times your actual cost.
This leaves room for:
Cost per delivery: $35
Target margin: 40 percent
Delivery fee: $49 to $55
There are four common pricing models when offering home delivery for farms. Each one solves a slightly different operational problem, so the best option depends on your delivery area, customer base, and order volume.
Same price for every customer.
With a flat delivery fee, every order pays the same delivery charge, no matter where the customer lives or how large the order is. This is the simplest model to explain and manage.
Flat delivery fee example: All customers pay a $10 delivery fee per order, whether they live 5 km or 25 km away.
Pros
Cons
Fee increases by distance or zone.
With distance-based pricing, customers pay more the farther they are from your farm or packing location. This usually uses kilometers, miles, or predefined distance ranges.
Distance-based delivery pricing example:
Pros
Cons
Free delivery above a certain cart size.
With order minimum pricing, delivery is free once the customer spends a minimum amount. Orders below that threshold either pay a delivery fee or are not eligible for delivery.
Order minimum delivery example: Free delivery on orders over $75. Orders under $75 pay a $12 delivery fee.
Pros
Cons
Different prices by postal code.
With zone-based pricing, you group customers into delivery zones and assign each zone a flat rate. Zones are usually based on cities, neighborhoods, or postal codes.
Zone-based delivery pricing example:
Pros
Cons
This is useful for wholesale and long-distance routes.
A common range for food delivery is: $0.80 to $1.50 per kilometer or $1.30 to $2.40 per mile
Your actual rate depends on:
Always calculate your real cost first.
For most farms and food hubs, self-delivery remains the most profitable option long term.
Here’s a table comparing self-delivery vs delivery through a third-party to help you compare the pros and cons:
Monthly delivery cost: $1,400
Cost per delivery: $11.70
Flat fee of $15 to $18 works well.
Monthly delivery cost: $5,800
Cost per order: $12
Zone-based pricing works best.
Monthly delivery cost: $3,200
Cost per delivery: $28
Distance-based pricing is ideal.
Read more about how food hubs coordinate orders and deliveries from multiple farms
Local Line is an all-in-one farm sales platform that makes delivery easier to manage and more profitable.
With Local Line, farms and food hubs can:
Instead of guessing at delivery pricing, you can build real costs directly into your checkout flow.
Explore Local Line’s farm delivery and pickup management features
Delivery should grow your business, not drain it.
When you calculate:
You can finally price delivery with confidence.
Local Line helps farms, CSAs, food hubs, and co-ops turn delivery into a scalable, profitable channel instead of a hidden expense.
Book a free demo to see how delivery pricing and zones work in Local Line.
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