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> In order not to lose money, Postmates is limiting the free deliveries to orders over $30, which make up about 50% of the orders on Postmates. New employee here (just joined this week) -- one of the things that I find so compelling about Postmates is that it's focused on building a profitable business, without having to subsidize orders.
> In order not to lose money, Postmates is limiting the free deliveries to orders over $30, which make up about 50% of the orders on Postmates. New employee here (just joined this week) -- one of the things that I find so compelling about Postmates is that it's focused on building a profitable business, without having to subsidize orders.
If there's another market player that is willing to subsidize orders and provide the same service as you (let's call them Amazon, Google, and Uber) then commanding a profit is not feasible, so I'm not sure if that's the right thing to be chasing at this moment, as Jeff Bezos famously said: "Your margin is my opportunity".
On-demand delivery is increasingly becoming a commodity business, coupled with a labor-scarce market and big players that have more money to spend on their side project than your entire market cap.
Don't get me wrong, I love Postmates, but won't use it for a while because UberEATS is providing free delivery to me for the next 3 months - and that's the problem!
Earlier quoted context omitted.
> one of the things that I find so compelling about Postmates is that it's focused on building a profitable business, without having to subsidize orders. So, like...ummm... a real business?
Don't tell anyone but that's kind of unusual around these parts.
I feel like uber deliveries, postmates, amazon prime, google express are all converging towards similar business models.
> In order not to lose money, Postmates is limiting the free deliveries to orders over $30, which make up about 50% of the orders on Postmates. New employee here (just joined this week) -- one of the things that I find so compelling about Postmates is that it's focused on building a profitable business, without having to subsidize orders.
> without having to subsidize orders If there's another market player that is willing to subsidize orders and provide the same service as you (let's call them Amazon, Google, and Uber) then commanding a profit is not feasible, so I'm not sure if that's the right thing to be chasing at this moment, as Jeff Bezos famously said: "Your margin is my opportunity". On-demand delivery is increasingly becoming a commodity bus…
Maintaining strong unit economics ensures that we are building the right products and operating the platform effectively. It is easy to subsidize if you have the capital but beyond just being expensive you also lose an important signal to running your platform.
Our requirement for strong unit economics has made our work harder but I do believe that it has made us make better decisions and force us to innovate instead of spend.
EDIT: This comment was made before it was edited. I would like to follow up to the edits. Specifically the Bezos mention on about margins.
There is a difference between seeking strong unit economics and profits and having them. Postmates has always had them by choice. We can choose do whatever we wish with those margins. We have regularly reduced our pricing because we have made our platform more efficient. If you were subsidizing your growth you wouldn't have the motivation or signals to identify the efficiencies.
If you are subsidizing your unit economics and your competition drops prices they are forcing you to lose more money. We prefer seek efficiencies and pass those savings on instead of just spending more money.
1. I guess as a single person, I don't fall in this 50%. I never have orders that large, which makes this service something I'm obviously not that interested in. They should have made it appeal to all 100% of their users, like Amazon Prime. They could have made it so it was free delivery based on just select places where it made sense. Why cut off 50% of your user base for the subscription service?
> "..free delivery on all orders from over 3,000 Plus merchants..."
2. This is incredibly misleading. "over 3,000" has to refer to their entire market because here in Chicago, I've only ever seen about 10-15 places that show up in the "Plus" section. That's a pretty limited amount of restaurants in the "Plus". That list has also only changed maybe once or twice in the months they have had "Plus". And it's a very small variety (of honestly, not that amazing places). I wonder with the addition of this service they actually end up beefing that number up in their various markets because right now, that stat is just marketing fluff.
As you can see on my two points above, I'm not sold this is going to play out anywhere as well as Amazon Prime did. I bet they see a pretty slow adoption rate on this until they make it much more compelling. Or I also assume a lot of people are going to sign up for this only to be disappointed by the lack of options I mentioned in my 2nd note above. They are definitely marketing it in a misleading way.
Also, it's worth mentioning that Postmates has one of the worst custom support teams I've ever seen. On two separate occasions I have sent an order issues support ticket to never get a response back. Which was even more frustrating when it said they always get back to you within 24 hours after I submitted the issues. I had to eventually complain about it on Twitter before I finally got a reply from them. Quite the bummer.
EDIT: I do want to add a quick note to this. While I'm very critical above, I do indeed think Postmates has the best UX and app of the similar services available. Once they can just iron out some of the kinks I mentioned above, I think the potential of the service is indeed high.
> In order not to lose money, Postmates is limiting the free deliveries to orders over $30, which make up about 50% of the orders on Postmates. New employee here (just joined this week) -- one of the things that I find so compelling about Postmates is that it's focused on building a profitable business, without having to subsidize orders.
> one of the things that I find so compelling about Postmates is that it's focused on building a profitable business, without having to subsidize orders. So, like...ummm... a real business?
> "Postmates is limiting the free deliveries to orders over $30, which make up about 50% of the orders" 1. I guess as a single person, I don't fall in this 50%. I never have orders that large, which makes this service something I'm obviously not that interested in. They should have made it appeal to all 100% of their users, like Amazon Prime. They could have made it so it was free delivery based on just select places…
1. We will bring this down over time, give us a few weeks. ;)
2. We have over 3,000 Plus merchants across the markets we're operating in. I can't think of a direct competitor who has more and we're adding many, many every week.
3. Our customer service has been suffering lately - this is a totally valid point. At some point we didn't catch up well enough with our growth. I'm personally working with the team and we're doing many things to improve this. I hope we can move the needle here soon.
I feel like uber deliveries, postmates, amazon prime, google express are all converging towards similar business models.