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

Delivery Startups Are Back Like It’s 1999

nytimes.com

Post reply on HN
Print view View original

51–60 of 67 posts

Re: Delivery Startups Are Back Like It’s 1999

#51

Post by makomk »

gambiting wrote: post #32
smacktoward wrote: post #29

Earlier quoted context omitted.

Assuming the local store still exists by then.

As far as I understand, those delivery services still do all their shopping locally, to avoid renting warehouses and dealing with suppliers. So basically - a courier gets the order, goes to a nearest shop, buys all grocery, and delivers it. If anything, the local shops win in this scenario.

I'm sure they'd be able to find some way to accidentally take the local stores they relied on with them when they go; local businesses aren't cynical enough to deal with Silicon Valley shadyness. (Remember Groupon and the wave of business failures it created? The same or worse could happen to stores if Instacart goes bankrupt and never pays for the last n weeks/months of purchases.)

Re: Delivery Startups Are Back Like It’s 1999

#52

Post by akgerber »

Another big difference between today & 1999 is that today there are a lot more un- and underemployed people, which makes business based on being a 'network' employing 'contractors' is a lot more practical, since the alternative to such work is unemployment, as opposed to a full-time job with predictable hours & benefits.

Re: Delivery Startups Are Back Like It’s 1999

#53

Post by ZitchDog »

idlewords wrote: post #47
ZitchDog wrote: post #31

Earlier quoted context omitted.

I stand corrected - I am from the midwest and didn't realize SF was so much higher than the US average in terms of socio-economic mobility.

It's not. Young people with no money move here (like to any other city) from Podunk and make their way up the ladder. If they're in tech, the end point is much higher and you get there faster. You're not going to see a Tenderloin drug addict or one of the Mexican day laborers waiting outside Home Depot make their fortune here. Nor will you see someone like Kevin Rose reduced to working at Burger King, however much va…

This jives more with my personal experiences in visiting SF, but I'm no expert. Seems that a few silent downvoters still disagree.

Re: Delivery Startups Are Back Like It’s 1999

#54

Post by oo7jeep »

lnlyplnt wrote: post #2

I never understood how companies like instacart explained this to their investors. Over time one of several things must happen: 1. Instacart magically makes a courier capable of doing 4 trips an hour 2. Instacart drastically increases it's prices 3. Instacart Severely lowers the compensation to courriers

What if Instacart isnt a delivery startup?

Re: Delivery Startups Are Back Like It’s 1999

#55

Post by trounce »

refurb wrote: post #15
govindkabra31 wrote: post #6

Earlier quoted context omitted.

Or, they get 20-25% discount from retailers (coming out of stores marketing budget and reduction in store staff cost). EDIT: The discounts come from the cost savings stores will see from delivery companies, to clarify to people commenting margins are not that high in grocery business. 1) These delivery services are become sales and marketing channel for stores. 2) Cut down time it takes for cash register scanning eac…

What's the margin on groceries? 1-2%?

Average gross margin in a traditional grocery store in the US is 26-33%, depending on local competition. There is a huge range (0-90%) by product category however.

Net income after labor, distribution, and fixed costs ranges 1-6%, depending largely on market share and fixed cost control

Reference: I helped traditional retailers with price optimization for almost 20 years

Re: Delivery Startups Are Back Like It’s 1999

#56

Post by hnnewguy »

lnlyplnt wrote: post #2

I never understood how companies like instacart explained this to their investors. Over time one of several things must happen: 1. Instacart magically makes a courier capable of doing 4 trips an hour 2. Instacart drastically increases it's prices 3. Instacart Severely lowers the compensation to courriers

>I never understood how companies like instacart explained this to their investors.

They don't need to explain anything. Most of the time the founders and investors are in on it together. Just get an exit.

Re: Delivery Startups Are Back Like It’s 1999

#57

Post by sarah2079 »

govindkabra31 wrote: post #7

There are some major differences. 1) Increased pool of unskilled labor-- manufacturing industry tanked, increased immigration. 2) Proliferation of internet connected, smartphones. 3) Avoiding obvious mistakes: no free deliveries for a bottle of coke, like in webvan days. 4) Doing direct store to consumer deliveries, avoiding warehouses, getting 20-25% cut from retailers (who see this as savings in marketing cost and…

Google shopping express will happily deliver you a $1.67 bottle of coke for free if you are covered by their free trial. This is not their ultimate business plan (outside the trial is $5 per store for 10 items max), but get in on the trial if you can! I have been getting free delivery from them for over a year now.

Re: Delivery Startups Are Back Like It’s 1999

#58

Post by CocaKoala »

bitJericho wrote: post #26

"After all, the worst case is that we’ll go back to doing the same thing I did when Rewinery went under — running out to the store." No, the worst case is that Rewinery took out your favorite mom and pop shops and now you have to go to walmart to get your second favorite wines.

Can you clarify this point for me a bit? Because I'm not confident I follow.

Somebody orders their favourite wine from Rewinery. That wine is, by your own admission, not available at Walmart. But the wine still gets delivered, right? So somebody, somewhere, went to a store and bought that bottle of wine. If they're not getting it from the mom and pop shops, where are they getting it? Surely Rewinery isn't stockpiling bottles of wine from wineries all over the country, just waiting to deliver them.

So there clearly must be some store, somewhere, which is getting a lot of business because couriers from Rewinery keep on buying wine there. Right? It may not be a mom and pop store, but it assuredly has the selection that the deliveree is looking for, otherwise Rewinery wouldn't be offering his wine. So there must exist someplace close by where he can buy his favourite wine, even after Rewinery shuts down.

I think you're confusing online retailers with courier delivery services; you can argue that Amazon drove Borders out of business, but if I'm paying somebody to drive to Barnes and Noble to get some books and bring them to me, it's hard to see how my use of that service will lead to Barnes and Nobel losing business.

Re: Delivery Startups Are Back Like It’s 1999

#59

Post by ChuckFrank »

mayneack wrote: post #12
capkutay wrote: post #4

Weren't the delivery startups of the 90s severely bloated? From what I remember, they had fleets of delivery trucks, warehouses, distributors, etc. Today's delivery startups are pretty lightweight (Not counting Amazon or Google since they're already $100b+ companies).

In my limited experience with Google shopping express, they are pretty light weight too. They will only deliver something from a store nearby, they don't seem to have a warehouse full of stuff.

Google is outsourcing their deliveries. They aren't the ones actually doing the delivery. From their wikipedia page it's clear that The deliveries are subcontracted to a courier service, 1-800-Courier. Plus they aren't warehousing anything as well. It's all point of sales logistics.

Re: Delivery Startups Are Back Like It’s 1999

#60

Post by ameister14 »

idlewords wrote: post #47
ZitchDog wrote: post #31

Earlier quoted context omitted.

I stand corrected - I am from the midwest and didn't realize SF was so much higher than the US average in terms of socio-economic mobility.

It's not. Young people with no money move here (like to any other city) from Podunk and make their way up the ladder. If they're in tech, the end point is much higher and you get there faster. You're not going to see a Tenderloin drug addict or one of the Mexican day laborers waiting outside Home Depot make their fortune here. Nor will you see someone like Kevin Rose reduced to working at Burger King, however much va…

That's true, but that's the case pretty much everywhere. The difference here is that the Mexican day labourer's son/daughter can learn to code at school and completely change their fortune by the time they are 22.

That's pretty significant. In a small town in Minnesota, people won't follow that path because it would be completely outside their experience. Not so here.

Post reply on HN