How Instacart makes money

Опубликовано: 10 Октябрь 2024
на канале: Dark Mode Digest

Full video on my channel 👇
‪@DarkModeDigest‬

Instacart serves 4 stakeholders: consumers who use the app to purchase items, shoppers who purchase and deliver those items, retailers who provide the items, and brand partners who fight for ad space in the app. The Instacart app aggregates local grocery, retail, and convenience stores for on-demand delivery and pickup. Customers browse and purchase items to have them delivered within a few hours. They purchase from stores like Target, CVS, Kroger, and Wegmans.

This is where Instacart gets most of its money: from transactions the consumer makes.
Instacart takes a delivery fee of $3.99 on orders over $35. It also takes a service fee which varies depending on your location and the number of types of items in your cart. These transactions made up about 70% of its revenue in 2022 which equates to $1.8 billion.

The company also has a membership service called Instacart Plus which costs $99 per year and offers free delivery for orders over $35. Shoppers on Instacart’s platform work flexible schedules and choose when and how much they work.

Instacart has built technology to make its shopper workforce as efficient and effective as possible. It balances supply and demand to ensure there are always enough shoppers to fulfill orders promptly. Shoppers make money from their base pay of $4 per order (which dropped from $7) and 100% of the tip. Instacart is known for improperly treating its gig workers which is why you see shopper-initiated campaigns like #DeleteInstacart. Shoppers have a love/hate relationship with Instacart.

The third party in Instacart’s marketplace is the retail store. These stores were reluctant at first to sign up with Instacart but now after many years of growth and hard work, Instacart has developed a strong active consumer base that’s proven to be very attractive. Retailers have grown interested in using Instacart to grow their reach through new sales channels on an established marketplace, facilitate on-demand delivery, and gain valuable consumer insights to improve their business. Instacart has now expanded beyond its marketplace model to become a viable technology partner to retailers with the launch of its Instacart Platform in 2022 to help with online storefronts, fulfillment and logistics, brand ads, and inventory management.

The last user of Instacart’s massive marketplace is the brand partner. The company appeals to brands by providing a new platform for advertising and exposure. Brands can reach new customers and promote their products, helping to increase brand recognition and drive sales. Instacart has unbundled the core services it provides in its marketplace model in order to increase demand for businesses that want to leverage its digital properties to retain direct relationships with consumers and speed up their digital transformation.

Subscribe to ‪@DarkModeDigest‬ for more tech insights!