Postmates is like any other grocery delivery app and was among the first of its kind, and it delivers more than just-food. It has been designed like “a remote control for your city” by which you can order food and other services delivered to your address. Postmates is working in more than 100 metro cities across the USA. The business model of Postmates is often compared with the other apps of the same domain such as UberEats but is highly unique in delivering goods i.e. through human messengers. These human couriers are connected through an app and GPS. When a customer wants things to be delivered, the messengers are notified.
As this business model is highly unique, many investors got attracted to it. It was launched in 2011, and since then it has witnessed great success especially in the first four years. Because of its great work, the company was able to collaborate with big companies like Apple, Starbucks, Chipotle, etc. To know in detail what the Postmates like food delivery app does, let’s divide their business model into different segments.
Postmates Details Overview:
|Founders:||Sam Street, Sean Plaice, and Bastian Lehmann|
|Founded Date:||1 May 2011|
|Headquarters Located in:||San Francisco, Calfornia, United States|
|Funding Received till 2015:||$138 Million|
|Valuation of Postmates:||$800 Million|
|Daily Orders||8500 (Till 2016)|
|Average Order Size||$45|
As the User-based program got failed, Postmates faces many obstacles for gaining funds. But slowly and steadily things got changed, and then Postmates starts getting funding from time to time. The latest funding Postmates increases its valuation to $800 million.
Here is the Fund timesheet of Postmates:
|March 2011||$60K Speed|
|May 2011||$750K Angel|
|April 2012||$1.2 Million Angel|
|March 2013||$5 Million Series A|
|February 2014||$16 Million Series B|
|Jan 2015||$35 Million Series C|
|February 2015||$80 Million Series D|
Features of Postmates:
A food delivery app is actually an ecosystem that is divided into 4 different apps. These are:
- Restaurant App
- Customer App
- Delivery Person App
- Admin Panel
We will discuss the features of each:
1. Customer App:
The features of the customer app are:
- User Sign Up and Log in
- Searching Restaurants and Menu
- Tracking Order
- Payment and Order Placement
- Push Notifications
- Review & Ratings
- Customer Support
2. Restaurant App:
Features in the restaurant app are:
- Restaurant owner Sign Up and Log in
- Managing Menus
- Managing Orders
- Rating & Reviews
- Push Notification
3. Delivery Side:
Features for the delivery boys app are:
- Delivery Boy Sign Up and Log in
- Orders details and status
- Order History
4. Admin Panel:
Features that are essential in the admin panel are:
- Admin Login
- Restaurant Manager
- Payment Management
- Discounts and Coupon Manager
- Technical Assistance
What makes Postmates different from others?
Apart from the fact, that the idea of Postmates was the best shot of its founders, there are many features in the app which are highly exceptional. From its initial beginning, the business model of Postmates was highly focused to be stand out in the market. The only reason it got the limelight was due to its uniqueness and amazing features. Some of the unique features which make it stand out from the market are:
- Allows people to order anything from any location in the city
- Comes with special stores for customers
- The delivery fee is highly reasonable. It depends on the distance from the pick to drop off point.
- The messengers can deliver the order within an hour
- Pay structure of Postmates is another thing that is attracting users towards it. $5 is the minimum amount for the Postmates delivery fee, but sometimes the fee is less than this.
- Customers can track the location of the messenger through the GPS to know how far the product has reached.
- Latest feature of Postmates is the “Pick up” option which was launched recently for expansion.
Business Model Canvas of Postmates:
1. Restaurants ft. Retail Stores
2. Delivery Personnel
1. New partnerships with retail stores
2. Hiring Delivery Persons
3. User Acquisition
4. Managing Orders and Processing them
5. Creating it managing technological infrastructure
6. Processing Transactions
2. e-Partner retail stores & their products
3. Part-time delivery persons
1. Users can order anything from partner stores
2. Postmates charge a nominal delivery fee
3. Things Delivered in less than 2 hours
Partner Retail Stores:
1. Extended Customer Base
2. Good Recognition on the platform
1. Earn good money by working part-time
2. Delivery guys even receive tips from uses.
1. Social Media
2. Customer Support
3. Review, Rating & feedback system
2. Mobile app for Android users
3. Mobile app for iOS users
1. People who don’t want to go to a store to buy things
2. People who want to order eatables – cooked food or grocery
3. Users who want home delivery of products from their local stores
Partner Retail Stores:
1. Technology e Partner retail stores & their products
2. Part-time delivery persons
1. Technological Set Up & running costs
2. Salaries to permanent employees
3. Payments to delivery persons
4. Part-time delivery persons
1. Delivery fee charged from users
2. Commission charged from retail stores
Values offered by Postmates to its user entities:
There are 3 main entities in Postmates: Customer, Delivery Personnel, and Restaurant Owners. Postmates provide valuable incentives to these entities. Let’s have a look at these incentives:
1. Postmates services are available for users 24 hours a day and 365 days a year.
2. Customers can make an order from anywhere for a completely different location in comparison to their physical presence.
3. Products will be delivered within an hour of the order placed.
1. Postmates is a great platform for merchants to sell their products
2. They have to a very reasonable amount to the delivery boys or messenger for their work
3. They can also serve their customers at their doorstep.
1. Flexible work schedule
2. As per the revenue model of Postmates, delivery boys will get 80% of the total delivery fee.
3. Messengers’ earning totally depends on the number of deliveries
How Postmates work?
1. Find or create a need. This is the first step of how does Postmates make money. Mobile app development companies like Amplework, are having business consultations who can give the proper consultation for the business model and revenue sources which is also beneficial for the customers.
2. Payments are done at the order time. The delivery fee would be added to the total bill depending on the distance between the pick-up point and delivery point.
3. The penultimate step is matching. What is the responsibility of the Postmates fleet? After the order is done by the user, the notification of the product and other details would be sent to the nearest messenger close to the shop. The details would be matched by the messenger during buying the product for no conflicts. The order must be bought and delivered within an hour.
4. Another exciting feature of Postmates is that the users can track the location of their order. Users can also send feedback after receiving the order. They can also give the tip to delivery guys through a feature.
Revenue Model of Postmates:
There are 3 main important sources of revenue in Postmates.
1. Delivery Fee: The users have to pay a very small delivery charge i.e. of $5 to the delivery boys which can be reduced to $3 or even less on some occasions. Whatever the delivery is, 80% of it would be given to the delivery boys or messenger and the rest is of the company. The delivery fee has always decided how much does Postmates pay to the delivery persons.
2. Convenience Fee: There is a 9% convenience fee charged by Postmates to their customers when the users are happy to pay in order to get goods delivered at their doorstep. Unlike the delivery fee, whose major portion goes to delivery boys, the convenience fee goes straight to the company.
3. Merchants fee: Postmates has recently launched a collaboration with the local merchants. This is beneficial for both parties as the merchants get more customers and the Postmates get payment from the merchants i.e. a small fraction of every order.
In this article, we have covered almost every aspect of the business model and revenue source of the Postmates app. On-demand delivery services like Postmates, or BigBasket, Grofers, etc. are huge in trend. If you also want to develop such an application you can let us know. We, at Amplework, the best mobile application development company in India, is having expertise in meeting such customer needs. Let us know your requirements.