Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

What is Instacart really charging? the breakdown

np.reddit.com

Post reply on HN
Print view View original

71–80 of 92 posts

Re: What is Instacart really charging? the breakdown

#71

Post by grandalf »

baddox wrote: post #61
enraged_camel wrote: post #53

Earlier quoted context omitted.

>>Why do you care what the profit margin is? Because not knowing it creates an information asymmetry and makes it more difficult to make a rational decision about whether to pay for the product or service, or look/wait for alternatives. It's not just about what the product or service is worth to me. It's also about a sense of fairness. I'm OK with a 20% markup on bottles of water at ball games. I'm not OK with a 200%…

I find that attitude a bit strange. Carried to its logical conclusion, you wouldn't want to buy a used car from someone if they received it for free, regardless of how much they're charging vs. market rates. It makes sense to compare a product offering with other offerings on the market, but it doesn't make sense to me to care about the profit margin. What if one firm can offer a product cheaper than all equivalent c…

> Carried to its logical conclusion, you wouldn't want to buy a used car from someone if they received it for free, regardless of how much they're charging vs. market rates.

Great point. These objections to Instacart are not just bizarrely irrational, they are at odds with how the service economy works.

Re: What is Instacart really charging? the breakdown

#72

Post by enraged_camel »

baddox wrote: post #61
enraged_camel wrote: post #53

Earlier quoted context omitted.

>>Why do you care what the profit margin is? Because not knowing it creates an information asymmetry and makes it more difficult to make a rational decision about whether to pay for the product or service, or look/wait for alternatives. It's not just about what the product or service is worth to me. It's also about a sense of fairness. I'm OK with a 20% markup on bottles of water at ball games. I'm not OK with a 200%…

I find that attitude a bit strange. Carried to its logical conclusion, you wouldn't want to buy a used car from someone if they received it for free, regardless of how much they're charging vs. market rates. It makes sense to compare a product offering with other offerings on the market, but it doesn't make sense to me to care about the profit margin. What if one firm can offer a product cheaper than all equivalent c…

The point I'm making is that a buying decision depends on much more than just the price you're paying. All kinds of information go into people's decision-making process. For instance, if you knew that the duck-fur coat (or whatever, I don't know if that's a real thing) you are about to buy was made by torturing ducks, you would be less likely to buy it, even if the price, by itself, was reasonable. This is why a lot of companies that sell animal products go to great lengths to keep such information from consumers: because the resulting information asymmetry benefits them.

The idea that at the end of the day the product/service is either worth it to you at X price or it isn't is simply wrong.

Re: What is Instacart really charging? the breakdown

#73

Post by enraged_camel »

grandalf wrote: post #69
enraged_camel wrote: post #47

Earlier quoted context omitted.

Several of my friends have raved about Instacart recently, saying the convenience and time savings are well worth the meager delivery fees. Normally I'm not that into such services. However, I desperately needed groceries yesterday, but I was feeling sick and didn't want to get out of the house. So I decided to give it a try. I got on the site as a first-time user and entered my zip code. From a list of stores around…

> Turns out there is a margin, and it is at least 20%, if not much more. This is not true. In some stores Instacart offers the same as in-store prices, other it does not. The same is true of anything one buys on Amazon. Low-cost items that ship with Prime shipping are usually marked up a bit, but I order from Amazon (and Instacart) in spite of this because of the convenience offered. You can pick a basket of goods in…

Maybe it is based on store. I don't know - and that's the problem. Like I said, Instacart (as far as I could tell at a glance) doesn't make the information easily available. That's the problem.

I did some casual searching and discovered that they supposedly have page (https://www.instacart.com/store/prices) where they list their markups per store, but it doesn't work for me.

Re: What is Instacart really charging? the breakdown

#74

Post by baddox »

enraged_camel wrote: post #72
baddox wrote: post #61

Earlier quoted context omitted.

I find that attitude a bit strange. Carried to its logical conclusion, you wouldn't want to buy a used car from someone if they received it for free, regardless of how much they're charging vs. market rates. It makes sense to compare a product offering with other offerings on the market, but it doesn't make sense to me to care about the profit margin. What if one firm can offer a product cheaper than all equivalent c…

The point I'm making is that a buying decision depends on much more than just the price you're paying. All kinds of information go into people's decision-making process. For instance, if you knew that the duck-fur coat (or whatever, I don't know if that's a real thing) you are about to buy was made by torturing ducks, you would be less likely to buy it, even if the price, by itself, was reasonable. This is why a lot…

I suppose you have a point: if I thought earning profit (or a certain level of profit) was immoral, then I would want to know the profit margin before I made a purchase. I personally don't hold that moral belief, but undoubtedly some people do.

Re: What is Instacart really charging? the breakdown

#75

Post by dangrossman »

meesterdude wrote: post #56
CydeWeys wrote: post #24

Earlier quoted context omitted.

The 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.

but shipping is an additional charge - YOU are paying to have it shipped to your door, not amazon.

There is no shipping charge for Amazon Subscribe & Save items (the subscriptions with discounts he referred to). You don't need a Prime membership either.

https://www.amazon.com/Subscribe-Save/b?ie=UTF8&node=5856181...

Re: What is Instacart really charging? the breakdown

#76

Post by brown9-2 »

jimmywanger wrote: post #51
brown9-2 wrote: post #48

Earlier quoted context omitted.

It seems unethical for a company to tell you "our markup for this grocery store is 15%+" when in reality it was ~50%.

Is it unethical for stores to advertise "savings up to 50%" and have most items not be on sale for 50%?

The difference here is that shoppers in that store can see the final price and actual savings before purchasing. Can you do the same with Instacart?

Re: What is Instacart really charging? the breakdown

#77

Post by dasil003 »

CydeWeys wrote: post #24
dasil003 wrote: post #17

Earlier quoted context omitted.

It'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.

The 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.

Well, to be fair, I think both models make perfect sense. But I don't think Amazon is necessarily more transparent. In case it wasn't clear, I was talking about list prices, not including shipping.

In either case, you have to go seek out the on-premise retail prices, and in fact this is no different than traditional price comparison shopping whereby you learn that different stores have different loss leaders to get people in the door, and if you really want to get the cheapest price you have to shop a lot of different places. I'm not sure whether Amazon's model of centralized distribution with direct delivery has greater economies of scale then the big box store model, but I'm worried people are blinded by Amazon's convenience and don't realize how often the prices are really quite bad.

Re: What is Instacart really charging? the breakdown

#78

Post by chrisseaton »

enraged_camel wrote: post #53
chrisseaton wrote: post #46

Earlier quoted context omitted.

Why do you care what the profit margin is? Either the product or service is worth more to you than the money that they're charging, or it isn't.

>>Why do you care what the profit margin is? Because not knowing it creates an information asymmetry and makes it more difficult to make a rational decision about whether to pay for the product or service, or look/wait for alternatives. It's not just about what the product or service is worth to me. It's also about a sense of fairness. I'm OK with a 20% markup on bottles of water at ball games. I'm not OK with a 200%…

> makes it more difficult to make a rational decision

Your arguments are the opposite of rational though - and I'm not insulting you, I mean in the economic meaning of a rational person that just considers the cost and the benefit. Your arguments are irrational and emotional.

But I think you have a better argument that you haven't made clear - the markup gives you information in that if the markup is high then it is more likely that someone else is willing to sell to you for less if they can tolerate a lower margin. If a margin is very low then that's less likely, as there's nowhere to go.

Re: What is Instacart really charging? the breakdown

#79

Post by fragmede »

CocaKoala wrote: post #38
Nullabillity wrote: post #32

Earlier quoted context omitted.

> Does this person also expect businesses to disclose their profit margins before he's comfortable doing business with them? Is that really such an unreasonable demand?

Do you expect a restaurant to give you the ingredient cost and labour cost of your meal on your bill, so you can tell how much the privilege of having somebody cook for you was?

I've thought of that before, and think it would be really great to know. I love to know which restaurant is simply reheating Sysco pre-prepared foods, and which ones are spending extra on organic free trade ingredients. If the food tastes delicious but the chef is underpaid because they're buying more expensive ingredients relative to the less tasty restaurant which buys cheaper ingredients with a larger markup.

Though; I've also considered how a reverse BlueApron service might work - you bring ingredients to a chef and kitchen, who then cooks the food for you. My cooking ability, limited to the occasional meal prepared after work is nothing compared to a master chef who's gone to school and practiced their art for every day for years as a job, and I'd gladly pay to see a master at work. (I doubt that particular niche is big enough to sustain a business though because, well, restaurants exist.)

Re: What is Instacart really charging? the breakdown

#80

Post by zaroth »

maxerickson wrote: post #54
zaroth wrote: post #6

When 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…

It 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/

Eventually 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.

Post reply on HN