Delivery Charges Create Pricing Transparency
Delivery charges create pricing transparency. When delivery is a separate line item, customers clearly understand what they are paying for. It avoids the need to inflate product prices, which can make you less competitive.
Charging also encourages efficient ordering behavior. Customers are more likely to place larger, consolidated orders to justify the delivery fee. That means fewer trips, better route efficiency, and lower cost per delivery for you.
Charging for delivery is about running a sustainable, predictable business, especially in wholesale, where margins are tight.
Protect Your Margins: Know Your Costs
Distribution is a separate business to your manufacturing one, and it has a separate cost center. It has its own Profit & Loss and Balance Sheet.
As well as the direct costs, there are hidden management costs: driver absence due to vacations and sickness. And like any other business, there are plenty of problems to deal with every day.
When you absorb those costs, you are discounting your products, eroding profit, and making it harder to grow.
How to Calculate Cost Per Delivery
Let us calculate the average cost per delivery. This example uses annual delivery costs, divided by the yearly number of deliveries.
| Cost Item | Amount |
| Driver wages (include employer taxes) | $75,000 |
| Driver vacation | $5,000 |
| Management | $5,000 |
| Total Manpower Cost | $85,000 |
| Cost Item | Amount |
| Route planning/optimization | $600 |
| Fuel | $8,200 |
| Parking | $300 |
| Tolls | $350 |
| Road Tax | $150 |
| Inspection | $150 |
| Service & Repairs | $1,000 |
| Depreciation | $5,000 |
| Total Fleet Cost | $15,750 |
| Cost Item | Amount |
| Driver absence/sick | $1,200 |
| Fines | $250 |
| Total Spontaneous/Miscellaneous Cost | $1,450 |
| Cost Item | Amount |
| Manpower Cost | $85,000 |
| Fleet Cost | $15,750 |
| Spontaneous/Miscellaneous Cost | $1,450 |
| Total Cost | $102,200 |
| Deliveries per day | 40 |
| Yearly deliveries (Daily x 365) | 14,600 |
| Average cost per delivery (Total Cost / Yearly deliveries) | $7.00 |
To download a copy of the spreadsheet and enter your own values, click here
What Customers Might Push Back On
The biggest fear of charging is potential friction. Some customers, especially smaller accounts, may resist added fees or compare you unfavorably to competitors offering “free” delivery, even if it is already factored into pricing.
There is also a perception issue. “Free delivery” feels like a benefit, even if customers are indirectly paying for it. Charging separately can feel like a loss, even if the total cost is similar.
Middle-Ground Strategies: Segment Your Customers
High-volume, loyal customers may still qualify for discounted or waived delivery, while smaller or less frequent buyers cover their own logistics cost. This lets you reward the right behavior strategically.
You do not have to choose one extreme. Many wholesale bakeries use hybrid models:
- Free delivery above a minimum order value
- Tiered delivery fees based on distance or order size
- Subscription-style delivery for regular clients
This lets you stay competitive while still protecting your margins.
Implementing the Change
In Streamline, go to Company > Emails > Send a Mass Email.
In this view, select the recipients from the list. You may choose multiple users at once.
Once your recipients are selected, click Send Email.
Create your customer email using the template below:
Subject: Important Update Regarding Delivery Fees
Dear Valued Customer,
We hope this message finds you well, and we sincerely appreciate your continued support of our bakery.
Due to rising costs associated with transportation and delivery operations, we find it necessary to introduce a delivery fee of $5 for all orders. This decision was not made lightly, but it allows us to maintain the quality of our products while keeping our pricing as stable and affordable as possible.
To help minimize the impact, we are pleased to offer free delivery on all orders over $150.
We remain committed to providing you with the same fresh, high-quality baked goods and reliable service you have come to expect from us. Your understanding and support during these challenging times mean a great deal to us.
Thank you for your continued partnership.
Warm regards,
[Your Name] [Your Bakery Name]Streamline supports, all at address level:
- Free delivery
- Flat delivery fee
- Delivery rules
- Conditional charging depending on spend per order
- Free delivery if weekly average is above a determined amount
- Minimum order per delivery, so the order may not be placed if the minimum is not met
Learn more about Streamline’s Delivery and Distribution features
Bottom Line
If delivery isn’t priced, it’s eating your profit. Charging for it—strategically—gives you control over costs, customer behavior, and long-term growth.
Think big. Imagine your business without the logistics. You finish production and a distributor comes to pick up your work, by the pallet. How much easier life would be.
See how Streamline ERP can fit your operation.
Tell us how your business handles orders, production, inventory, delivery, finance, and reporting. We’ll show you how Streamline connects the workflow.
