Most delivery businesses set their delivery fee by copying whatever the competitor down the road charges.

That’s not a pricing strategy — it’s a guess. And guesses quietly eat margin until you notice something’s wrong. Here’s how to actually think about it.

Flat Rate or Distance-Based: Which One Should You Use?

There’s no universally right answer, but there is a right starting point depending on where your business is.

Flat rate — everyone pays the same fee regardless of where they live — is simple, predictable, and removes friction at checkout.

Customers know what they’re paying before they hit confirm. For most operators just launching their own delivery system, this is the smarter move.

Distance-based pricing adjusts the fee by zone or kilometer. It’s fairer for your margins on longer routes, but it adds complexity that can confuse customers mid-checkout and drive abandonment.

Once you have real order data showing where your customers actually live, zones start to make sense. Until then, flat rate keeps things clean.

Should You Ever Offer Free Delivery?

Yes — but strategically, not permanently.

Free delivery is a powerful conversion tool when used correctly: a first-order incentive, a minimum spend threshold (“free delivery on orders over $30”), or a limited promotional window. It gets hesitant customers over the line.

Used as a default, though, that cost doesn’t disappear — it gets absorbed silently into your margin, or quietly passed onto your product pricing in ways that make you less competitive.

The smartest operators use free delivery as a lever, not a baseline. Pull it when you need a lift. Don’t leave it on all the time.

According to a 2026 Toast survey of over 850 consumers, nearly half are comfortable paying between $3 and $6 in delivery fees.

That’s a clear signal: customers expect to pay something — you don’t need to offer free delivery to compete.

Want to see how Zeew gives you full control over your delivery pricing? Book a demo →