Menu Price Padding
Also called: online price padding, menu markup for delivery
What is Menu Price Padding?
Menu price padding is setting higher prices on delivery platforms than in the restaurant, so that commission, packaging and funded discounts still leave the intended margin.
Why Menu Price Padding matters
Without padding, every online order earns materially less than the same dish sold in-house. With too much padding, listings look expensive next to competitors and conversion falls.
Menu Price Padding formula
Online price = Target net price ÷ (1 − commission rate)
Add packaging cost before applying the divisor.
How Menu Price Padding works in practice
Work backwards from the net realisation you need after commission and packaging, then sanity-check the result against comparable listings nearby. Pad by category rather than uniformly, since low-value items suffer most.
Worked example
To net ₹300 at a 22% commission, the listed price needs to be about ₹385 before packaging.
Frequently asked questions
Menu pricing is commercial, though platform agreements may include parity terms — read yours before setting prices.