Postmates is an online delivery application. Postmates tie-up with local stores and restaurants and accomplish customer expectations by delivering ordered food or goods from local stores or restaurants.
Postmates service was launched in the United States by Bastian Lehmann, Sean Plaice, and Sam Street in 2011. Postmates currently serving in 3500 U.S. cities with 5,341 employees(2019). Postmates revenue reaches $500 million to $880 million within one year from 2019 to 2020. This drastic increase in revenue shows how customers are attracted to the business model. Let us dig into how Postmates applications make money with their prominent business model.
The business model for Postmates clone application:
Key partners.
- Local stores and Restaurants.
- Delivery drivers.
Key resources.
- Software setup for admin.
- Retails stores software setup.
- Restaurant software setup.
- Retail and restaurants and their products.
Key activities.
- Partnership with new stores and restaurants.
- Customer data management.
- Delivery partners data management.
- Stores and restaurants data management.
- Stores and restaurants payment management.
- Delivery fee management.
- Delivery partners pay management.
- Orders management.
- Return or order cancellation management.
Value propositions.
Customers
- Order anything from any listed store.
- Delivery within 2 hours.
- Delivery services with minimal cost.
Vendors
- Large customer base.
- Recognition because of the platform.
- More profit.
Delivery drivers.
- A part-time job with pay.
- Tips from customers.
Channels.
- Admin setup to maintain all data and processes.
- Mobile app and website for vendors. (ios, android)
- Mobile app and website for delivery partners. (ios, android)
- Mobile app and website for customers. (ios, android)
Revenue streams.
- Delivery fee from customers.
- Advertisement for platforms.
- Commissions from stores.
Cost structure.
- Setup maintenance cost.
- Advertisement.
- Delivery drivers pay.
- Permanent employees salary.
Simple 4 step delivery process:
There are four steps involved in a cycle that is responsible for the successful delivery.
- Step 1: Browse food or products: The customer can explore the list of available products of restaurants and stores.
- Step 2: Order Placing: After adding the required products to the cart. Payment options setting up
- Step 3: Matching: Notifications are sent to stores or restaurants, and products are collected and handed over to delivery drivers after the payment process is done.
- Step 4: Tracking your products: After product pickup, the delivery driver’s live location is shared with customers to ensure timely delivery.
Revenue model:
Every business should have a powerful revenue model for extensive success. The reason behind the Postmates revenue of $880M is its simple and imperative revenue model.
Let’s have a glimpse at how they work:
- Delivery fee: The users have to pay a delivery fee of $5 that decreases to $3 or even less during special offers. 80% of the delivery fee is to the messengers, 20% is to the company.
- Convenience fee: Postmates charges a 9% convenience fee the users are happy to pay to get products delivered to their doorstep. The convenience fee goes to the company’s accounts.
- Commissions from stores and restaurants: Making Collaboration with Postmates stores reach a large customer base. So a certain percentage of the total bill is paid as a commission fee to Postmates.
Final Note
So, this is how Postmates makes money. The real reason behind Postmates’ reach is the simple business model with a strong revenue model. If you are interested in this blog and want to launch the Postmates clone application for the delivery business, you can contact us with the following contact details. You can also find more info about Postmate’s business model and how Postmates make money from our professionals.
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