It’s been quite a ride for many businesses to transform into digital businesses over the past few years, and it’s been the same for groceries.
The term ‘let’s go shopping’ used to be associated with wandering around different stores in the neighborhood, which was a rather time-consuming process.
Besides, it required a shopper to locate the ‘desired product’ in the grocery store and then wait in a long queue to complete the billing process. Fortunately, today you can check the needed information instantly, and again, you can pay even when you have no money in your pocket. Thanks to online grocery delivery apps.
According to Nielson, 25% of consumers buy groceries online, and they employ their smartphones or tablets for this purpose by creating shopping lists, searching for discounts, comparing prices, and placing online grocery orders. Your retail grocery store needs to satisfy its demands and build a mobile app to remain competitive.
There are numerous grocery delivery apps, but Instacart is winging the game. Before discussing how to make money with Instacart, let’s go through Instacart.
What is Instacart?
It has to be Instacart; however, that is the most significant player in the grocery delivery space today. A San Francisco- based company, allows people to order groceries online and is also about to launch its IPO to empower its business.
By partnering with big companies such as Whole Foods and Costco super value, Instagram revolutionized the grocery demand industry. A recent ranking named it one of America’s most promising companies in 2015, and it is currently valued at over 3.4 billion dollars after having raised an additional $400 million.
The success does not stop here; Instacart’s business model encourages other entrepreneurs to invest in the Instacart app script as it automates traditional grocery business and enables them to hit the market.
Now coming to the main question. Novice entrepreneurs usually get confused to think how an app like Instacart makes money? Let’s understand this in detail.
How does an App Like Instacart Make Money?
Just like other entrepreneurs, you have finally launched an app similar to Instacart for your grocery delivery business. Grocery delivery was one of the profitable businesses during the pandemic time. Now you can accept and manage online orders, and the data you are pulling from the solution will help you think of all kinds of new ways to make a strong brand in the market.
But what are the primary ways to earn money from the delivery app? Intrigued, aren’t you? Well, by the time you are done reading this post, you will have learned different ways to earn money from an app like Instacart.
Grocery Delivery Charges
If local grocery stores do not have their own delivery team, such kind of an app can allow them to dispatch online orders in exchange for nominal delivery charges. Delivery fees can be varied from store to store and can be a percentage of the total order volume.
Grocery delivery apps make a large portion of their revenue from delivery charges. Fees for a location-specific app can vary based on what the app owner wants and the distance between locations.
Peak Hour Charges
In peak times – like weekends- grocery delivery apps can make extra money by raising their delivery charges. Delivery to particular locations or certain menu items may be limited during these busy hours. Customers need to pay extra to request these menu items or have them delivered to these locations.
Instacart is an example of one such app. The company sets surge pricing during weekends. Menus and locations are limited during peak hours, and Instacart charges extra for them.
Indeed, you can generate more revenue by charging more during peak hours. It’s also wise to remember that not every customer is willing to pay a premium and that they may choose a competitor that offers a cheaper service.
Commission on Each Order
This is the primary source of income for an app like Instacart. When you perform a service, it stands to reason that you can expect to be reimbursed by the company or individual that benefits from your work. Start-ups in the grocery delivery industry are no different from any other business type.
The commission per order is an appropriate payment method for an app like Instacart that allows it to sell more items to more people. Local grocery stores should be able to negotiate the commission percentage either on an individual basis or in the form of a flat fee charged to each store that signs up for the app.
Another excellent way to earn money with a grocery delivery app is through advertising. Apps can offer a limited time period of advertising to stores at a cost. Advertisement is when mobile delivery apps feature a store in the top search results for a specific period of time.
The local store owners need to pay a certain amount to be featured on the app. Benefit? Stores that are featured are displayed on the top in search results and can entice more customers than their rivals.
Banner Ads: Apps that deliver groceries can charge stores for promotion on the home screen of their apps. Through this, stores approach more customers when their apps are opened.
Promotion Campaign: Delivery apps often run promotions as part of their marketing campaigns to attract customers by collaborating with stores and offering coupons, discounts, and other offers. Every time a store campaigns for more brand recognition, the profits have to be reduced, and a commission has to be paid to each app.
The success of companies like Instacart demonstrates the potential of online grocery delivery. You can easily make money through various sources while allowing local grocery stores to partner up with you to expand their business and profitability.
Hence, if you don’t have an app, now’s the time to focus your efforts on developing an app like Instacart so you can make money and succeed in the future.