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What is Instacart really charging? the breakdown
- ddorian43 10y agoCome on dude, can't you add the 43% on the title ? Why do you have to make it clickbait?
- curiousgal 10y ago$150 for $80 worth of groceries, wow.
- maxerickson 10y agoAnother way to look at it is that it is $150 of groceries. I'm sure not going to be using a service with such a high mark up, but I can see how someone with a high income might be willing to spend extra for the convenience.
- moonka 10y agoWow, I knew there would be a markup but that is way more than I expected.
- zaroth 10y agoWhen buying commodity items like most produce but in particular packaged goods, there's still an unsolved problem of "how much should I be paying for this?" and oftentimes I see even unit prices which are straight up miscalculated. The problem seems compounded when shopping for this stuff online, when each individual item is so cheap, it takes too many clicks to realize how badly you are being ripped off. I find even when grocery shopping online through a store's own site the prices are inflated over in-store. It compounds the anxiety over someone else picking low quality/old stock to the point where I won't grocery shop online as much as would really like to optimize the process. I also find the menu system and scrolling lists of items an incredibly frustrating way to pick out the right gallon of milk. I think the underlying fact is that it's extremely expensive for Instacart to provide their service. I think an automated / lights out grocery store where you order through an app and drive by on the way home to pickup the food would be an order of magnitude more efficient. But you have to build the warehouse (like Amazon does) to allow robots to fill the order. If you're paying for the overhead of food to be stocked on shelves nicely enough for picky customers to look at it, and then only after that point are you filling an online order, that's hugely wasteful.
- maxerickson 10y agoIt depends a lot on how many online orders you are filling. In a lot of areas there wouldn't be the population density to support a pickup only location, but it's easy for an existing store to implement pickup and delivery services. A locally owned store here has done it using Rosie: https://www.rosieapp.com/ https://www.rosieapp.com/
- zaroth 10y agoEventually the only option will be pickup only. It's the simple evolution of removing as much of the (human) cost as possible. Of course it seems crazy to make the claim today that people won't o inside a store to pick their own groceries. About as crazy at it will seem to people then, that we used to do exactly that.
- kinkrtyavimoodh 10y agoI've never used Instacart but it seems to be a weird thing to outrage over, when apparently you are told the final payment upfront, and you know you are ordering from a premium service that is fundamentally a luxury offering. And I'd expect most people to have some basic ballpark idea of how much everyday groceries cost. Does this person also expect businesses to disclose their profit margins before he's comfortable doing business with them? Ever bought a bottle of water at a stadium? We're looking at several 100 percents of markup there.
- icebraining 10y agoWhile some people do get outraged by high margins, the main issue I see here is that they do pretend to publish their markup, but it's widely out of whack with reality. 63% may technically fit into "15%+", but it's highly misleading. They should just remove it.
- notyourwork 10y agoExactly. It is like saying this item only cost a few dollars. When in reality it is a $100,000. I didn't lie but it is surely misleading.
- IAmGraydon 10y agoWow.
- IAmGraydon 10y agoI have no idea how you think "15%+" is misleading. You can't simply ignore the + sign to make your case. That says the markup STARTS AT 15% and goes up from there. Also, the markup on store items wasn't 63%. That was after additional fees, tax, tip, etc. The markup was 42.8%.
- icebraining 10y agoI didn't ignore the plus sign, that's why I called it misleading and not outright fraud. There's an expectation that when a number is quoted, that the value is somewhere in its ballpark, otherwise it'd be completely meaningless: they say "it may be 15%+", which if you read it as a pure logical statement, it can literally be any amount. It's only meaningful because of that common expectation, which they are exploiting. Fair enough regarding the 42% vs 63%, though.
- true_religion 10y agoIf you rely on a lot of service companies like Uber & Instacart, appified dry-cleaning and maid service then it may actually be cheaper for you to hire someone for 8 hours a day to do your chores. This guy ended up paying $70 for a single grocery trip, do that and take Uber twice a day, and you're verging on "I can hire personal staff" territory.
- Neliquat 10y agoWell technically, thats what they are doing already in your example, just on an ad hoc basis, rather than full time. Which I concede, is likely a better deal for many people. Hrmm, where does one hire this type of pa?
- true_religion 10y agoNetworking. I simply asked around with my friends, and someone was found who needed steady work.
- jasode 10y ago> it may actually be cheaper for you to hire someone for 8 hours a day to do your chores. Whatever math calculation one does, it has to factor in the hassle of becoming an "employer" which is a complication that most consumers don't want. E.g. If you pay someone more than $36 a week[1], a law-abiding tax payer would have to file a W2 to the IRS reporting the income. (Yes yes, most parents don't actually file W2 for their neighborhood babysitter but that's technically "tax evasion".) You can legally circumvent the W2/employer relationship by using an agency and that staffing firm becomes the "employer of record." However, there's no such thing as a free lunch and that agency has its own 50% to 100% markup on the personal assistant's hourly rate. This gets right back into Instacart pricing territory or even exceeds it. Without any survey data, I'm guessing that there's a huge market of customers willing to pay Instacart profit margins instead of becoming an "a W2 employer" or paying 3rd-party agency. [1] http://www.usatoday.com/story/money/personalfinance/2013/04/07/nanny-tax-domestic-help-irs/2045517/ http://www.usatoday.com/story/money/personalfinance/2013/04/...
- simplehuman 10y agoI do wonder which People are too busy to shop but won't pay 50 USD per hour for the shopping premium?
- aphextron 10y agoThere are plenty of people for whom $50 is a pretty good deal to save an hour of time. Whether that will scale is another question entirely.
- wpeterson 10y agoThis may be a confusing thing, I suspect Instacart may get volume discount from stores for bringing the extra business. So this markup may be based on discounted cost instacart pays, not necessarily what YOU would pay at the store. Still think it's a crazy premium, but I enjoy grocery shopping.
- Nullabillity 10y ago> So this markup may be based on discounted cost instacart pays, not necessarily what YOU would pay at the store. Doesn't that just make things even worse?
- brown9-2 10y agoCan you explain further? Because this makes no sense on its face. If they get a discount on what the grocery store charges, then the final price after their markup should be closer to the store's price, not further.
- mikeyouse 10y agoHis insinuation is that the "Instacart receipt" that the customer received is the discounted one that reflects the bulk discount. If an individual went to the store and got the same list of items, it would be more expensive, so the markup wasn't $140 - $80 but more like $140 - $100. I have no idea if that's true or not..
- pyrophane 10y agoInstacart and some of these other apps charge a LOT of money, so they go to pretty great lengths to hide the amount they are actually charging. Instacart is being especially clever by raising the price of the item then charging an additional service fee and delivery fee with, apparently, surge pricing. It also isn't clear how much of any of this goes to the actual person doing the work, so you still need to tip around 20%. For me, this isn't just about whether it is "worth it" to not have to shop for groceries, but also whether there is a much cheaper option available through either your grocery store or a non-Instacart personal shopper. It boggles my mind that people are paying this much for the privilege of being able to use an app rather than having to interact a bit more with an actual human being.
- dasil003 10y agoIt's not just apps. Amazon is making it really easy to purchase on a whim via Echo or subscription to staple items. They even offer a 20% discount if you subscribe to a minimum number of items. However if you actually go and price this stuff out, it's often 30-50% cheaper at Walmart or Target. I get the convenience factor, but it really adds up when you're talking about daily necessities.
- CydeWeys 10y agoThe Amazon pricing makes sense though, because Amazon is paying the cost of shipping it to your door rather than you paying the cost of time, money, and gasoline to go fetch it at a store and bring it back. Amazon's model is at least price-transparent.
- pfooti 10y agoInitial post removed, here's the imgur link to the receipt that was accidentally left in the bag and screenshots of the instacart list. https://imgur.com/a/r6KGn https://imgur.com/a/r6KGn
- free2rhyme214 10y agoHighway robbery
- pfooti 10y agowellll, I'd wondered how instacart worked, when my nearby nice grocery store got bought by safeway. Originally I thought it was just the delivery fee, and I felt like the delivery people couldn't possibly be getting a living wage out of the work. Here at least I can see that instacart gets enough revenue to probably be sustainable and pay someone a reasonable wage for doing the actual work of going to the grocery store on my behalf. That said, I've just been finding great small grocery markets in the outer sunset to shop at. I'm lucky to live in a place where I can walk to a number of excellent small markets, so I just do that instead of paying for grocery delivery.
- MegaButts 10y agoI'd love to hear about some great small groceries in the outer sunset. Please share!
- pfooti 10y agoAssuming you mean the Outer Sunset of San Francisco: Noriega Produce Mart (gus's, but I love that it's NPM) has almost everything I need, except the meat / fish selection is pretty low. Noriega and 43rd(ish). Other Avenues (judah and 41st-ish) is a worker-owned cooperative. They don't carry meat at all, but they have a great bulk food selection. Both have excellent produce selections and a surprising amount of useful dry goods - with the exception of meat / fish, the only real pull to Andronico's was the parking lot. I went to Guerra Quality Meats for the first time last weekend, and it was pretty great as a butcher, and had some fish selection. They're at taraval and 15th. I'm considering going back to marin sun farms for their CSA meat boxes. There's also a fish seller going in at irving and 42nd (or so) where the old cajun restaurant was. That's a long-term thing, though, since it's been "coming soon" for a while. There's a couple great Asian markets up on irving - sunset super at 25th and irving is really great, although a tad overwhelming at times. They've got a lot of meat and fish. No grocery store in the area is as cheap as going to safeway and shopping frugally (or quite as satisfying as Berkeley Bowl, but since I don't go to the east bay often anymore, it's hard to justify a really long drive to the grocery store), but these places sell high-quality organic food and other good brands of dry goods (I can get both king arthur and antimo caputo flours for my breads and pizzas, respectively, at NPM) and are local stores rather than chains, so I'm willing to pay the premium to support them.
- chrismealy 10y agoDoes Instacart ramp it over time? I've only used it once and there was no markup at all.
- deleted 10y ago[deleted]
- tommynicholas 10y agoMany comments saying something to the effect of "$140 for $80 worth of groceries? Robbery!" What's $80 worth of groceries? It's what you're willing to pay $80 for. The grocery store is marking up the food from their suppliers, is that a rip off? Grocery stores in urban areas charge more than in rural areas, rip off? When there's only 1 small store in an area (food deserts) they charge 10-30% more - an outrage? This is great information to have and a benefit to consumers that they know the difference, but if Instacart gives you a price and you pay it then that's a fair price by definition. It's not an outrage in any way.
- CydeWeys 10y agoThe outrage is that they are intentionally obfuscating the cost of using their service. It's not unreasonable at all to want to know how much more using their service costs than if I were to go shopping myself; that's how I can do the cost evaluation of whether it's worth it for me to spend that extra money to save me the time of a shopping trip. Information is critical for driving free markets. Instacart is pulling some sleazy shenanigans, sending them down a path pretty similar to where Uber has ended up. I don't make it a habit of patronizing businesses that use deceptive pricing practices to try to rip me off.
- jon2k17 10y agoThere are plenty of same as store price grocers on instacart. Why not shop there?
- tommynicholas 10y agoThe price of their service was $140 for the groceries the customer selected. Hard stop. The grocery store doesn't tell you what the underlying cost of their food was, nobody does that. It's not a requirement. Now it could be something consumers DEMAND which would give a competitor an advantage if they did it (see Everlane with their transparent pricing) but it's not unethical or sleazy not to disclose the underlying costs of your goods.
- brown9-2 10y ago
- friedman23 10y agois this markup present for items advertised as same in store prices?
- pentae 10y agoMy housekeeper here in Thailand costs about $290 a month and fetches groceries for my household daily, so this makes me feel quite lucky.
- deleted 10y ago[deleted]
- xapata 10y agoBreaking news: business charges margin above cost of goods to support employees and make profit. We don't ask Walmart to disclose the prices it pays to its suppliers. Why care about Instacart's suppliers?
- ex3ndr 10y agoWhen i worked in UAE (United Arab Emirates) grocery delivery was like magic: you can just call any grocery shop to bring food to your flat and they bring it to you in a few minutes. Delivery was performed by cashier - he just take required items and bring in in a bag to you. So simple, so cost-effective and so useful. I wonder if anyone is done something like this at scale?
- coldcode 10y agoI wonder how transparent they have to be legally, and who decides that. Saying your fees are 10%+ and having it be 60% seems highly misleading. Then again I saw a TV commercial that advertised free shipping and handling for a fee. I guess if no one notices and no one can force them to be reasonable, you can do just about anything.
- aphextron 10y agoI just used Amazon Prime Now for the first time. As a long time Instacart user in the main target demographic, I just don't see how they can compete. The delivery fees are already rolled into my existing Prime account. On top of that most prices are actually lower than the stores, rather than marked up. The issue all comes down to scale. Automated robot warehouses and delivery vans are far more efficient than individual drivers searching through grocery stores.
- bognition 10y agoThe main problem is that Amazon Prime Now isn't available everywhere
- eizenh3im 10y agoI used to shop on instacart but the lack of transparency made me switch back to going-to-the-store shopping. Started using prime now for about 2 months and love how much more transparent it is about its costs. They charge the same as the store and add a default $5 tip as suggested tip. Wish instacart would get their shit together. Delivery business is a growing market and would love to have multiple great providers. Also feel for instacart since it was so much early to the game than all of its current competitors.
- mnm1 10y agoDo people really expect corporations to be ethical and not make the most money possible given the circumstances? It sounds like many people expect to leave corporations to their own whims while at the same time expecting them to be fair, self-correcting, and a benefit to society. Sounds pretty delusional to me. That's like sitting each day staring at the computer for years on end and expecting a finished program to emerge while having done nothing. Maybe that's why this business model is exactly the same as that of supermarkets that offer delivery direct to consumers (in the US), down the opaque pricing.
- apersona 10y agoI think the reason why people are outraged is because Instacart already has a service and delivery fee. You would assume that the fees is where they're making the money. In grocery stores, etc. there isn't a service fee, so it's expected that the prices are marked up. In Instacart, there is already a service fee, but the prices are also marked up.