Instacart has a good chance because of Amazon. The brick and mortar stores are scared to death of amazon. They don’t have the logistics or tech expertise of Amazon. Nobody will download a Safeway app to shop only at Safeway. They need a neutral 3rd party like Instacart that allows customers to shop at Safeway, Whole Foods and every brick and mortar, and delivers the goods the same day.
Because brick and mortar stores need Instacart more than Instacart needs them, I suspect the stores pay Instacart good money to deliver the goods for them. From the podcast it sounds like that’s exactly what happens.
Instacart could be a profitable business. Restaurant food delivery won’t be. There’s no way to lower costs through scale, and running a business that costs more per devliery than your revenue isn’t going to last.
For grocery, I use good eggs instead of instacart. All local and extremely high quality. Just like I am using Amazon all the time, I am using good eggs without thinking much, end of the day, it is just chores. It saves me time to TJ too.
I don’t get how instacart can afford full-time employees to pick groceries unless they markup the groceries a lot. There’s no way a small delivery fee will cover the cost of picking groceries and delivery. They aren’t the grocery store, so they can’t eat a loss on delivery because they profit on the groceries.
They only charge $5.99 or $7.99 for delivery depending on how specific of time you want it. $14.99/mo gets you unlimited delivery. If they pay $15/hr, then 30 minutes of picking costs $7.50 (plus payroll taxes, workers comp, etc) which make sit closer to $9.00. They are losing money before the cost of delivery. There must be a pretty hefty markup on groceries just to cover the cost of picking them. Then the fee covers the actual delivery portion.
Instacart charges the shops too. It benefits from grocers’ fear of amazon. It’s a way for management of Safeway and Costco to tell shareholders they have an amazon strategy.
Ah, they revenue share. Some food delivery services do that. It’ll be interesting to see what model wins out. I feel all of these are just placeholders until drone delivery is an option. That’s when they’ll actually be capable of big profits.
Drone delivery is not going to be an option anytime soon. For it to be an option, it would have to be capable of carrying large loads, 50 pound or more. Except for pentagon predator drone which cost millions, that’s a long way off.
Well, now you are forcing me to take the other side. No one, including me, ever said that total gun banning was wanted (perhaps in a dream world but that is not reality). All I wanted was military grade weaponry out of the hands of civilians.
