Setting best prices and billing for delivery business

Most delivery operators price by feel and find out at tax time that half their routes lost money. The fix is not a fancier spreadsheet. It is knowing your two real numbers, cost per mile and cost per stop, and building every quote from a base fee plus those two. A delivery business does not sell packages moved; it sells driver-hours and vehicle-miles, and if the fee does not clear the loaded cost of both, volume just digs the hole faster. Here is how to price so each route earns and bill so the cash actually lands.

Find your cost per mile and cost per stop first

You cannot price what you have not counted. Add up every dollar the operation spends in a month, then divide two ways. Cost per mile covers fuel, maintenance, tires, insurance, depreciation, and lease, and for a light cargo van it lands around $0.65 to $1.10 all-in once you count the parts owners forget. Cost per stop covers the driver’s time to park, walk, hand off, and get moving again, plus a slice of dispatch and phone. At a loaded driver wage of $22 to $28 an hour and 8-12 stops an hour, that is roughly $2 to $3.50 of pure time per drop before you move an inch.

Do not use the IRS mileage rate as your cost. The 2026 standard mileage rate exists for tax deduction, not pricing, and it hides the labor and dispatch that dominate short urban routes. Build your own number from your own bills, because a dense-city van and a rural pickup have completely different economics.

Build the fee from three parts, always

Once you know your costs, every quote follows the same shape: a base fee, plus mileage, plus a per-stop charge. The base fee is a minimum that covers the fixed cost of dispatching and rolling a vehicle at all, and it is what stops a $4 sandwich delivery two miles away from quietly losing you money. Set it at $6 to $12 depending on your market, then add mileage above a free radius and a per-stop rate on multi-drop routes.

The mistake to avoid is the single flat fee for all deliveries. A flat $8 looks clean and quietly subsidizes your worst customers with your best ones. Charge for distance and stops separately, and the far, hard orders start paying their true cost instead of your other clients paying it for them.

Choose the billing model that fits the customer

How you bill matters as much as what you charge. Three models dominate delivery, and most durable operators run a mix. Per-drop gig pricing (paid at the door or via a marketplace app) is simple but the platform sets the rate and takes 15-30%. A subscription (flat monthly for X deliveries, or unlimited within a zone) locks in revenue and is loved by high-frequency customers like meal-prep or pharmacy clients. Recurring B2B contracts, billed net-15 or net-30 against a monthly invoice, are the prize: you set the price, you forecast the cash, and switching costs keep the client for years.

The move that changes the business is shifting weight from gig volume toward contracts and subscriptions. Gig work pays the bills while you find B2B clients; recurring accounts are what let you grow past a single van with revenue you can actually predict.

Automate billing before it eats your week

Manual invoicing is where small delivery businesses drown. The instant you have more than a handful of B2B accounts, use software: QuickBooks or Wave for invoicing and books, Stripe or Square for card-on-file so subscriptions charge themselves, and Bill.com or Melio for chasing net-terms accounts. Put every recurring client on card-on-file or ACH autopay, send invoices the day the work closes, and set automatic reminders at 3, 7, and 14 days overdue. The goal is that money moves without you touching it, because the hours you spend re-typing invoices are hours you are not on the road or selling.

Getting found is the part that decides everything

Great pricing means nothing if no one calls to book. Two things are free and worth doing now. First, publish a simple, honest rate structure, even a starting-at price, so B2B prospects can picture the cost without a sales dance; hiding all pricing loses more leads than any number scares off. Second, ask your three best recurring clients for a one-line testimonial and a Google review, because a delivery buyer trusts another business owner far more than your own ad. The local approach is in how to promote your delivery business locally.

The higher-stakes piece is a website that quotes and books. It should load fast on a phone, show your service area and a request-a-quote or rate form above the fold, and turn a searching operations manager into a booked account. The gap between a site that converts and a pretty one that does nothing is invisible until you compare lead numbers. To have that handled, get a free video walkthrough. For ads and SEO that fill the pipeline, see our services. If you need the full business plan and unit economics first, start at expntl.com.