Online delivery is what everybody has their eyes on. Postmates has been an ultimate accomplishment in the same segment. With its recognition in the market since May 2011, it has managed to remit the requirements of customers, surpassing 100 metropolitan cities in the USA. People get anything they want just by investing a few bucks. The Postmates Delivery service is owned by the very popular Uber itself. Hence, it becomes rudimentary to understand the Postmates business model. 

What Is the Postmates?

It is an online delivery module, fulfilling the requirements of the customers in all parts of America. The service started back on 1st May 2011. Its prime movers were Bastian Lehmann, Sam Street, and Sean Plaice. Postmates competes with the business module like DoorDash, Ubereats, GrubHub, and its subsidiary unit UberEats. Officially, Uber acquired Postmates on 1st December 2020 and since then, it has served thousands of customers with 100% satisfaction. 

Belonging to the Logistics industry, Postmates depends on the mobile applications that collect consumer demands and manages the inventories. By the end of 2018, Postmates was working with new 134 cities of the United States that marked 550 working stations for Postmates in the US market. Being the giant delivery source in the USA, it has acquired a largely populated area that appreciates Postmates over others.

Funding for Postmates Business-Revenue Module 

Postmates’ business plan has gained an extraordinary presence in the market. It has so many tie-ups with leading business modules. These tie-ups have invested huge sum to generate the maximum outcomes for their businesses. Hence, some of the popular fundings Postmates has received so far are stated below. Read and get an account of the businesses that get hooked with Postmates business model.

Proprietor  Sam Street, Sean Plaice, and Bastian Lehmann
Headquarters  San Francisco, California
funds, Postmatess received  $763M (as of September 2019)
Company’s  Worth $500M
Total orders booked  7500 (expected)
Average order size  $40 

 

postmates funding

What Is the Background (History) of the Postmates Revenue Model?

As already understood, Postmates was set up in the mid 2011. The service was operated under AngelPad’s accelerator cohort. Its initial tie-ups were Uncork Capital, Matrix Partners, Naval Ravikant, Russel Cook, Thomas Corte, etc.  

The company’s prime actions involve the deployment of applications for granting access to the small entities for showcasing their competence with the big deliveries like Amazon. Simultaneously, Postmatess announced huge growth in its 13000 human couriers with 2.5 million deliveries during June 2015. 

In the year 2020 (corona pandemic year), Postmatess has provided no-contact delivery of the packages to its clients. Moreover, customers were asked to send feedbacks, if any agent was found ill during the process. So these were some of the awesome implementations that were in the favor of the company and its service.

Criticism Faced by Postmatess

Good always comes with another side i.e. bad and the same was faced by Postmates during the previous year. So the bad thing was, people from New York City filed complaints against the popular delivery chains i.e. DoorDash, GrubHub, Uber Eats, etc. indicating that they were doing monopoly from their marketing skills and trying to dominate restaurants to charge the same prices when the customer dine-in with the customers paying for online delivery. The companies were gaining huge revenues by unintentionally exploiting the consumers. 

Read Also: Challenges Faced by Food Delivery Apps like UberEats, Postmates, Doordash & Swiggy

So this was the overall introduction to Postmates and its existence. Now, the coming section discusses the working of the Postmates Business Module. Read all the details carefully. 

What Is the Postmates Business Plan?

Postmates firstly works doing partnership bonds. The service believes in maintaining relations rather than implementing an employee model.

postmates business model

So in this way, the Postmates runs 3 segment functioning:

  • Customer
  • Merchants
  • Delivery or Postmates  

Customer Segment:

Customer term here refers to an individual who is willingly ready to spend a few bucks more on the exact price of the stuff, been delivered to their window. This is the contribution to the Postmates for their door-to-door service. The company hires merchants for broadly showcasing them to reach out to the targeted audience. The process focuses on customer relations for the better growth of the business. 

Merchants:

The next association is with the Merchants like food chains (restaurants), grocery market(small and big stores), and other channels. The association comprises exposure to these stores amongst the targeted audience. The merchants then deliver their products to the audience in comparatively less amount that benefits all three i.e. Customer, Merchant, and Postmates itself. The Postmates then give an attractive commission of around 15% to 30% depending upon the contract type. 

Delivery (Postmatess):

Not only customers but Delivery agents also got some major advantages being associated with Postmates. The Postmates revenue scheme is 80:20 for the delivery executive. Postmates gives an 80% of the total bill revenue to their delivery executive and the rest 20% is kept with the company itself. The company offers earnings of $25 per hour which is as huge as possible to make money from Postmates. 

food delivery app development

How Does Postmates Work?

Every business runs on some steps. These steps can either be your pre-planned versions or it can be an upcoming working strategy. Here the Postmates team has some pre-defined steps on which it operates.

postmates app development

The below-mentioned points explain it all: 

Explore

Finding the opportunity is what Postmates business model looks for. The initial step is to create demand for the required product. People utilize the web or mobile application to place the order or requirement of any product or service. 

Monetization

Orders get accepted, when they get paid. Along with this, a nominal amount of delivery charge is implied depending upon the location i.e. pick up point and drop-off locations. In this way, all the monetization happens by the Postmates themselves.

Assigning Demand

On the successful receiving of payment from customer-ends, the Postmates are assigned for the nearest store for collecting the requirement and delivering it to the customer. The dispatching of the product happens within 1 hour of the purchase of the order. 

Track

Here comes the tracking feature which allows any user to track the real-time locations of their Postmates via notifications. Customers will also be notified about the arrival of the Postmates at the respective destination. This improves the customer experience and reliability of the Postmates apps. 

Acceptance & Rating

Now that the product has been delivered by the delivery agent to the user, based on the overall process, the user gives a rating, tips to the delivery partner. This is the delivery agent’s part and a company does not show any interest in the tip and rating provided to the agents. So this was the overall process on which Postmates Business works. 

Related Blog: Grubhub Business and Revenue Model

Now we will study the benefits that occurred from the implementation of such processes or actions (similar to it). There might be some on-demand projects like Postmates, which will get benefited once they follow the above-said processes.

Advantages of Postmates Business Plan

The hard work that Postmates developers and the team have done is commendable. These have provided some benefits which now a day has become the base for the on-demand app development like Postmates, GrubHub, etc.

So here is a quick tour of benefits, you get when you have an app like Postmates. These also help in accelerating the business growth and generate the required outcomes in a short span. 

Read Also: DoorDash Pricing Model- Lessons on Making Money as the Food Giant Does

Order Placing

Does not matter from which part of the world you are from, you have got the ease to book your food, groceries, and any other item just at a click. Postmates is accessible to any place and users can submit their orders from any corner of the world. 

Variety

All the semi-popular and highly popular outlets, restaurants, grocery stores, etc. have been marked on the Postmates App. It becomes easy for the client to get their hands on their favorite thing as almost everything is available on the app.

Sustainable Delivery Hours

Postmates works quickly on the uptake for the delivery of the products. Usually, the products are being delivered within 1 hour of the submission of orders. Simultaneously, the app and its services are available 24*7 and 365 days a year.  

Pay Structure 

The paying policies for the users include delivery charges of $5 which become as low as possible when you apply certain coupon codes to the final payment. Here the delivery charges are implied seeking the distance, pick-up, and drop-off locations of the clients. 

There are some other features like tracking live locations of the Postmates, pick-up option is the newly integrated section in the app. So these make Postmates app stand-out from its competition. 

app development

Now we will learn about the feature-set options which are divided into 4 parts. These advantages are discussed in the paragraphs below:

  • Restaurant Side 
  • Customer Side 
  • Delivery Person Side 
  • Admin Side 

Having said that, these four prominent sections follows a certain journey according to the nature of the section:

Restaurant Side:

You need to login, manage the menu and check the push notification, taking care of the ratings and reviews, etc.

Must Read: How to succeed in Restaurant Food Delivery business?

Customer Side:

Here the functionality involves login, search options, adding to cart options, payment integrity, order tracing, submissions of review and ratings, and last but not least customer support. 

Delivery Side:

This is the user part that involves Registering,  Order Management, Order Status Updations, etc.

Admin Side:

This is the developer end i.e. Logging to the admin account, restaurant management, app control, payment governance, discounting and offers, and technical assistance. 

With all the important aspects of your business being integrated together for better results Postmates has been delivering solutions that are interesting and engaging. It makes it quite interesting for the solutions to be easily used by the various people who interact with the application.

How Does Postmates Make Money?

After you have encountered the in-depth knowledge on Postmates, here is what the people look at when it comes to the “On-Demand” business opportunity i.e, Revenue Model. Monetizing the app so developed is one of the basic utility of any business. It has become the need of the hour to understand the best revenue model for an app like Postmates.

postmates pricing model

Postmates generally earns money via its three prominent aspects i.e. Delivery Fee, Convenience Fee, and Merchant Programme. But in this article, we are going to discuss all the sources that make money for this giant delivery application. 

Delivery Charges

Like all other delivery apps, Postmates also charges some delivery fees instead of delivering anything anytime. The delivery charges depend upon the location of the client as well as of Postmates. The general delivery charges include $5 but during some special occasions, events, etc. the charges may get as low as $3 or even free. 

Another provision that makes Postmates this much popular i.e. 80% of the delivery charges goes in the account of Postmates and the remaining 20% remains with the company itself. 

Convenience Fee

Another revenue-making model is the term Convenience Fee which goes hand in hand with the delivery fee. Postmates charges around 9% as a convenience fee over others. The main thing about these parameters is this is easily acceptable by the individuals. 

Small Cart Fee

If the billing comes under $12, then a nominal cart charge is deployed which is around $1.99. This fee is charged just to ensure the exact delivery of the order within the timeframe.  

Postmatess Infinity

There are several subscription modules on which Postmates works from time to time. Postmates Infinity or Unlimited is a king of subscription which have the following benefits i.e. Your shipping fee reduces to $0 for order on or above $20, No extra charges, negligible prices, buying from partners is always charge-free.  

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Commissions

Being in partnership with Postmates has announced so many opportunities for the merchants. By getting on the premises of the company, these outlets are generating high order, negotiable card fee, and these merchants can focus on their businesses because the delivery is completely under the Postmates company. 

Postmates earn its revenue from the charges received from the orders on the website. The company has already arranged multiple services for multiple merchants. The company deposits the money before the taxation procedure which falls under the 15% to 30% criteria.  

The charges also depend upon the contract made between the client and each merchant partner. This commission approach is not applicable for non-partner dealers. 

Partnership

Another source of earning for Postmates Revenue Module is its tie-up with multiple channels via its API. The procedure helps in maintaining Postmates Discounting to deliver the services in the entitled areas of Postmates. 

Read Also: An Ultimate Guide to API Development

Businesses like the very popular beverage chain Starbucks, Instacart, and many other businesses have joined their hands using the Postmates API. Such ventures have delivered a strong business or revenue base to Postmates. 

The pricing model of Postmates application has inspired several businesses to grow better and stronger over the years. With various revenue channels Postmates has established a revenue generation system that would never fail. Simple yet efficient Postmates revenue model is followed by various businesses around the world.

How Much Does It Cost to Develop An App Like Postmatess?

People who are willing to get a mobile app development done, taking the fundamentals of Postmates should put a sight here. A survey explains the online food delivery business is expected to get a hike of $10,196 million most probably in this (2021-2022) year. 

Again the on-demand market for delivery apps like Postmates will worth around $14,679 till the year 2024. The percentage is growing at a CAGR of 9.5%. Hence, it is the right time to think about such a food delivery app development

cost to develop an app

Several factors contribute to the development of applications like Postmates. Keeping in mind the estimated feature a user wants, the cost of development comes from around $30,000 to $40,000. It comprises mobile app design, compatibility with both Android & iOS versions, app testing, deployment, etc. 

Now when any user wants a restaurant application, then this would come near to $50K to $60K. The price may vary from feature to feature, company to company. So this is all about the bucks you need to spend for getting your Postmates app development done.  

What are the Opportunities with Postmatess?

The online food delivery business is reaching its highest peak. As per the report updated by the USA today,  the food delivery business will touch a business peak of $22.332 billion with over 116.1 million users. 

Moreover, the business is expected to grow mainly in the United States up to $24.461 billion having $124.4 million users by the end of 2023. Hence, it is visible that Postmates and other apps like it will have a great future. So the individuals who are planning to have a food delivery app like Postmates, then this would be a perfect time.  

Conclusion:

To sum up, Postmates has changed the perspective of many delivery app business modules in the present time. The growth, popularity this business has seen is just out of track. Many industries are connected with Postmates to get the benefits of such a huge audience reach. Postmates is highly acknowledged in the USA and other regions. It has served millennials of people since its existence in the market i.e. 2011. Hence, this would be the right time to get your Postmates App Development done for getting upcoming business deals. There are other masterminds also which are prominently working in the same field i.e. DoorDash, Grubhub, Zomato, Uber Eats, etc. So think wisely and start your food delivery app by following the guideline given here.

consultation on postmates

Arun Goyal

Managing Director @ Octal IT Solution, a prominent Mobile App Development Company offering cutting-edge iPhone App Development and Android App Development services to Startups, SMEs and Fortune-500 Companies.

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