Dark kitchen: the commission beats the profit

“I thought I was competing with other kitchens. Turns out I had been competing with my own commission the whole time”

Nazar Romaniv runs a kitchen in Ternopil, in the half-basement of a former dormitory. No dining room, no sign, no windows either — just an extractor hood, four ranges, two blast freezers and couriers pulling in from the yard. The neighbours are in their second year of believing it is a warehouse.

Three different brands come out of this kitchen. Pizza, bowls and burgers — to the customer, three separate places with their own logos, menus and pages in the app. None of them knows the other two are cooking two metres away.

For Nazar they are three columns in one spreadsheet. One rent, one kitchen shift, one hood for all three.

That is how almost every dark kitchen that lasted longer than a year is built. One brand rarely loads the equipment enough to pay the rent.

What a dark kitchen is

The idea is simple to the point of cheek. If you do not seat guests, you need no dining room, no waiters, no good street and no interior designer. And that is most of a normal restaurant's costs, plus almost all of its start-up capital.

What is left is the kitchen. And delivery — the one thing a dark kitchen cannot exist without, because by definition no guest will ever walk in.

Delivery can be bought ready-made. The platform brings the customer, takes the payment, drives the order over and charges a percentage for it. In Nazar's case, twenty-eight. The deal looks like a partnership, and for three years he read it that way.

For the first two years it did look like a good deal to him, and broadly it was one. Nobody would ever have found a windowless basement kitchen with no sign. Nazar started with zero customers and took his first thousand orders in three weeks. On his own he would have spent a year getting there.

The question is not whether he needed the platform at the start. The question is whether anything changed over three years — and whether the owner noticed.

Three brands, one range

Three brands in one kitchen is not a marketing trick. It is a way to load the equipment. A range standing idle costs exactly as much as a range that is working.

The same goes for rent, the hood, the fridges and the wage of a cook waiting for an order. A dark kitchen lives on load. Three brands are the cheapest way to assemble it, and cheaper than any advertising for one.

Pizza sells in the evening, bowls at lunch, burgers steadily all day. Together they keep the ranges busy from eleven in the morning until eleven at night. One brand would give two hours of peak, ten hours of idle — and the same rent.

Five thousand four hundred orders a month. Revenue — 1 860 000 ₴. For a kitchen without a single table, that is decent money.

The platform's share differs for a reason. Burgers Nazar drives himself most often — the cheapest order and the shortest run. Bowls go almost entirely through the app: offices order them, and his own courier never makes the lunch peak.

What an order costs

The food cost Nazar knows exactly — a technologist recalculates it from the recipe costing cards every month. It is the one figure in this kitchen nobody ever eyeballs.

The chef weighs the finished dish, purchasing checks the invoices against it, and once a month the technologist rewrites the cards for the new prices. That loop works flawlessly.

Outside the box of food there was no accounting at all.

Pizza 128 ₴, bowls 133 ₴, burgers 105 ₴. Those three numbers Nazar can quote without opening the spreadsheet.

Bowls cost more in food than pizza, though they sell for less. It is the salmon and the avocado, whose prices jump so hard that the technologist rewrites the card every three weeks. Pizza rides on flour and cheese, and those get dearer slowly and predictably.

“I know the food cost of every dish down to the hryvnia. For ten years I thought that was enough”

The commission you cannot see

The platform takes twenty-eight percent of the order. Not of the profit, not of the margin — of the whole sum the customer paid.

This is no hidden clause. It is written in the contract, Nazar signed it knowingly and talked it through with a manager. But there is a difference between knowing a percentage and seeing a sum. A percentage sounds like a term. A sum sounds like a cost.

The gap between those two ways of serving up the same number is the gap between a clause and a line in a report. The first you sign once and forget. The second you look at every month.

On a pizza that is 112 ₴ out of every order. On bowls 98 ₴. On a burger 84 ₴. The numbers are small in exactly the way a single drop is small.

Nazar held them up against things he knows by heart. The commission on one pizza is about two hours of a courier's time. Or a third of an hour of a cook's, counted off the shift payroll.

He had never looked at these numbers on their own, because the platform transfers the money with the commission already taken out. The bank statement shows a clean amount, and it feels as if that amount is the revenue. The commission never passes through the till, never needs a payment order and never lands in any report. It simply does not arrive.

“If somebody sent me an invoice for three hundred and sixty thousand every month, I would have worked out what to do about it in two days. The way it is now — well, commission is commission”

112 ₴ and 128 ₴

On pizza the commission almost equals the food cost. For the delivery the platform charges as much as everything inside the box costs to make.

Couriers of his own

Nazar has his own couriers too — two per shift, on scooters, paid by the hour, with fuel on top. They appeared not out of a calculation but out of need: in the rain the platform sometimes refused orders, and something had to carry them.

Divide their wages, fuel, scooter depreciation and phones by the number of orders delivered and you get 55 ₴ per order. Half of what the commission on a pizza costs.

That gap is what holds up all the arithmetic that follows. It is also what creates the illusion that moving to your own delivery is an obvious decision. The illusion lasts exactly as long as you count one side only.

The figure is stable because the couriers are loaded evenly. It would hold at a bigger volume too, but only up to a point — past it he would have to hire a third, and the price would jump again.

• Hourly pay for two couriers
• Fuel and scooter depreciation
• Phones and the routing app
• Cover for sick days and days off

Difference per order

Now everything can be put side by side. Contribution is the order value minus the food minus whatever it costs to get it there. Everything else in the business is paid out of that.

Rent, kitchen wages, taxes, the bookkeeper and the owner's own profit all come out of this difference. So every hryvnia that leaves it weighs more than a hryvnia of revenue. Revenue you can grow with orders. Contribution you can grow only with price or channel.

Own delivery wins every time. The only question is by how much — and that is exactly where the brands turn out to differ twofold.

On pizza the difference is 57 ₴, on a burger half of that. The reason is arithmetic. The commission is counted off the order value, while a courier costs the same no matter what is in the box. So the dearer the order, the more own delivery gains.

55 ₴ for the courier, 57 ₴ of gain

The two numbers nearly match and mean opposite things. The first is what delivery costs. The second is what stays in your pocket if you switch to it.

The month in numbers

Nazar put it all together in one evening, and the evening turned out unpleasant. Not because the figures were bad. They were fine. What was unpleasant was what he had never spotted in them.

Contribution from all three brands together — 763 560 ₴. Fixed costs — rent on the basement, kitchen wages, utilities, the bookkeeper and taxes — 540 000 ₴. They do not care how many orders came in today.

That is the whole point of a dark kitchen: fixed costs stay low, so break-even arrives earlier than in a restaurant with a dining room. Nazar crosses it somewhere around the three thousandth order out of five thousand four hundred.

Net profit: 223 560 ₴.

Twelve percent of revenue. For a delivery kitchen that is a normal result, and for three years running Nazar called it a good one. He still calls it good — he just knows now what it is standing next to.

What the platform takes

Then he counted what he had never counted before. Not the percentage. Then came the sum.

One thousand two hundred and sixty pizza orders through the app at 112 ₴ of commission. One thousand and twenty bowls at 98 ₴. One thousand four hundred and forty burgers at 84 ₴.

Together — 362 040 ₴ a month. The same sum would cover:

• All the rent on the basement for half a year
• The wages of the entire kitchen shift for two months
• One and a half of the owner's monthly profits

That is nineteen and a half percent of everything the kitchen takes in. And it is 1.62 times more than Nazar earns in net profit. The biggest partner in the business turned out to be the one who never came to the kitchen.

He does not discuss the menu, does not ask about quality, does not know the cooks by name. He brings the customer and charges more for it than the owner keeps. There are no complaints against him — the terms were known from day one.

“I sat and stared at that figure for twenty minutes. It is bigger than my profit. It is bigger than every wage in the kitchen put together”

The number that shook Nazar

What got to him most was not the number itself but how long it had stayed invisible. Three years is thirty-six monthly reports, and the sum was in none of them.

The commission never came as an invoice. It was not a line in a report, did not pass through the till, needed no signature. The platform simply transferred less than the customer had paid, and the difference vanished before it could reach the books.

Three years of this. Roughly thirteen million hryvnias that went past the books, because they never entered them.

Nazar insists this is neither a trick nor a scheme. The platform did exactly what it gets paid for, and did it well. What made the cost invisible was not the company but the route the money takes to the account.

A cost nobody invoices does not get smaller. It gets invisible.

The urge to walk away

The first reaction was the obvious one, and Nazar even started acting on it. He ordered flyer artwork that same evening.

If own delivery brings 57 ₴ more on a pizza, move everything you can onto it. He ran a modest version — twenty percent of the orders that go through the app today. Modest on purpose: Nazar wanted a number he would believe himself.

Twenty percent looks like something you can do in a quarter. Forty would already mean rebuilding the business model. He was counting what he could picture on a Monday morning.

Seven hundred and forty-four orders. Plus 31 488 ₴ of contribution a month. Almost eighty thousand a quarter, if the whole thing works.

It looked convincing right up until Nazar asked the next question. How exactly are those seven hundred and forty-four orders supposed to move?

What it really costs

Orders do not move by themselves. That is the most expensive sentence in this entire story.

A customer used to opening an app will not suddenly start phoning the kitchen. He has to be told, given a reason, and ordering must be no harder than before. That means advertising, a site of your own, a discount on the first direct order.

And it means constant work, not a one-off promotion. A customer pulled over by a discount is back in the app the very next month if you forget about him. Habit is stronger than a discount, and habit is always on the side of whoever owns the app.

Nazar costed the minimum budget without which nothing moves at all: 45 000 ₴ a month. That covers ads in local groups, keeping the site alive, the discount on a first direct order, and a person running it all four hours a day.

Contribution gained, 31 488 ₴. The cost of getting it, 45 000 ₴. Both numbers are monthly. Both repeat, and one of them is bigger than the other.

This is exactly what Nazar would have missed if he had counted one side only. The contribution gain he worked out first, in twenty minutes. The cost of making that gain happen he never counted at all.

Net result — minus 13 512 ₴.

“I was already set to launch it. What stopped me was counting both sides for the first time instead of one”

Moving orders is not a decision but an investment

The contribution gain arrives every month, and the marketing is paid every month as well. These are not one-off costs against a permanent win. They are two permanent figures, and they have to be compared head on.

Both the gain and the cost are monthly

A one-off promotion can be weighed against a one-off win. Here both quantities repeat, so they have to be compared over the same horizon.

The break-even point

Nazar turned the calculation around and asked it the other way: how many orders have to move for those 45 000 ₴ to pay for themselves?

The average difference across the three brands is 42.32 ₴ per order. Forty-five thousand divided by forty-two and change gives 1 063 orders. That is how many have to change their habit for the budget merely to break even.

That is 28.6% of everything going through the platform. More than a quarter of the customer base has to be talked into a new habit — not in words, in fact.

This is no longer a promotion but a year-long campaign. It only makes sense when the owner understands that he is buying not orders but a change in behaviour. An order costs forty-two hryvnias. Behaviour costs considerably more.

Not twenty percent. Nearly half again as much.

28% of commission and the 28.6% threshold

Two numbers that look almost the same and have nothing in common. The first is a share of the order value, the second a share of the order count.

First move: two columns

Nazar did not walk away from the platform. He did not start the campaign either. The flyer artwork stayed artwork, for now.

He added two columns to the daily spreadsheet: how many orders came through the app and how many through his own channels. Before that there was one figure, the total. Splitting it cost fifteen minutes of the manager's time.

Now it is visible what is happening to the share. Visible every day, not once a quarter. In the first two months the share of direct orders climbed two points on its own, simply because the manager started noticing it.

Nobody set a target. Nobody promised a bonus. When a number sits in front of people every day, they start to move it. First by accident, then on purpose.

“The strangest part is that this number had been in the platform all along. I just never looked at it, because what interested me was revenue”

Second move: different brands, different rules

The second decision was about who exactly to move.

If the difference on pizza is twice the one on a burger, the effort belongs where it pays twice as much. Nazar stopped spreading the work evenly over all three brands. That sounds obvious, but until he did the maths he had spent three years running identical promotions on all three.

• Pizza — a flyer in every order with a promo code for a direct order
• Bowls — nothing, because an office lunch through the app cannot be intercepted
• Burgers — nothing, because a 29 ₴ difference is not worth a campaign of its own

One brand instead of three. The budget fell to fifteen thousand, and the gain stayed almost the same, because all the weight was in pizza anyway. Break-even for a single brand is easier to clear than for all three at once.

Four months in, that campaign came out positive for the first time. Not double, not fourfold — it simply stopped losing money, and that turned out to be reason enough to keep it.

“For three years I spent the same on three brands, because they looked the same to me. They were never the same”

Why the bowls stayed with the platform

They have the highest app share — eighty-five percent — and the lowest order value among office deliveries. Fighting for them costs more than handing over the commission.

Nazar calls it the price of a channel he cannot build himself. Office lunch traffic rests on the habit of opening the app at eleven, and no flyer will break that habit.

What to do on Monday

Nazar boiled it all down to three actions, and none of them needs a programmer or a new app.

• Count the platform's commission as a sum for the month, not as a percentage in a contract
• Count contribution per order separately for every channel and every brand
• Before any campaign to move orders to your own delivery, find the threshold: how many orders pay the budget back

The first two are done once and then live on their own. The third is needed every time the urge to “cut out the middleman” comes round. And it comes round regularly, usually after a chat with a colleague who supposedly pulled it off.

The middleman is expensive right up until you count what doing without him costs.

When walking away really does pay

When your order value is high, the run is short, and the customer comes back on his own. Then the difference per order is large, the marketing needed is smaller — and the threshold is easy to clear.

For Nazar exactly one position out of three looked like that. It is not a reason to give up the middleman. It is a reason to know where he is expensive and where he earns his keep.

The money does not vanish — you just do not see it

Nothing has changed in Nazar's kitchen. The same four ranges, the same three brands, the same two couriers a shift and the same hood humming from eleven. The platform stayed as well, on the same commission.

Two columns appeared in the spreadsheet, and in his head one sum appeared instead of one percentage.

Through them the commission, his own delivery, the marketing budget and the very question of who this business actually shares its profit with all look different.

How to see this in your own kitchen

Everything above rests on one row: not orders as a single figure, but each channel and each brand on its own — with the commission, the cost of your own courier and the contribution per order. As long as the commission stays a percentage in a contract, you see neither that it adds up to 362 040 ₴ a month, nor that the break-even for moving to own delivery is 28.6% of orders rather than 20%. When the same data is collected automatically, the cost of each channel becomes visible — which is exactly why owners of small and medium businesses use Finmap: to see the financial picture rather than assemble it after the fact.

Read also

• The food cost that eats your profit: how to find the real margin on a dish
• Courier Delivery Service: Profit Per Order, Not Per Turnover

Topic foundation: Management Accounting Explained: What It Is and Why Owners Need It