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What is Instacart really charging? the breakdown

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Re: What is Instacart really charging? the breakdown

#61

Post by baddox »

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%…

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 competing products, but with a much higher profit margin?

Re: What is Instacart really charging? the breakdown

#62

Post by aphextron »

I 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.

Re: What is Instacart really charging? the breakdown

#63

Post by unethical_ban »

tommynicholas wrote: post #42
CydeWeys wrote: post #28

Earlier quoted context omitted.

The 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…

The 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…

No, not hard stop. If understanding the cost of a service/product is expected (via getting an itemized receipt), and the cost of service is separated from the product (as is done via delivery fee, service fee, etc) then it is unethical to build in markup on the product itself.

It's the same reason I think mechanics are shitty when they charge 50%+ markup on parts for auto repair. I'm paying you for the service - the right thing to do is to show the cost of the service separate from the market price of the product.

Alcohol/food at a restaurant is different - it is clear and known that service and product are interwoven in the list price.

Re: What is Instacart really charging? the breakdown

#64

Post by aphextron »

simplehuman wrote: post #11

I do wonder which People are too busy to shop but won't pay 50 USD per hour for the shopping premium?

There 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.

Re: What is Instacart really charging? the breakdown

#65

Post by gdulli »

kinkrtyavimoodh wrote: post #7

I'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…

I think the convenience/laziness economy has an effect on younger people who have never lived as adults without it. They don't develop the same basic knowledge of the inherent/ideal cost of groceries or the ability to measure the total cost over time of car ownership vs. perpetual taxi service. I have friends who call an Uber even though our company buys us monthly public transportation passes. In a city with a good system.

Meanwhile I partition my everyday purchases among grocery stores, CVS, and Target based on a detailed knowledge of which product categories are inherently cheapest in each and which are currently or regularly go on sale at each and how aggressively. For someone with a six-figure salary I probably micro-manage it more than I need to. But I look at Instacart and Uber prices and just laugh.

Re: What is Instacart really charging? the breakdown

#66

Post by gdulli »

kinkrtyavimoodh wrote: post #7

I'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…

I think the convenience/laziness economy has an effect on younger people who have never lived as adults without it. They don't develop the same basic knowledge of the inherent/ideal cost of groceries or the ability to measure the total cost over time of car ownership vs. perpetual taxi service. I have friends who call an Uber even though our company buys us monthly public transportation passes. In a city with a good system.

Meanwhile I partition my everyday purchases among grocery stores, CVS, and Target based on a detailed knowledge of which product categories are inherently cheapest in each and which are currently or regularly go on sale at each and how aggressively. For someone with a six-figure salary I probably micro-manage it more than I need to. But I look at Instacart and Uber prices and just laugh.

Re: What is Instacart really charging? the breakdown

#67

Post by matz1 »

icebraining wrote: post #8
kinkrtyavimoodh wrote: post #7

I'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…

While 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.

It might be misleading to you but to them its increased revenue.

Re: What is Instacart really charging? the breakdown

#68

Post by bognition »

aphextron wrote: post #62

I 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 individ…

The main problem is that Amazon Prime Now isn't available everywhere

Re: What is Instacart really charging? the breakdown

#69

Post by grandalf »

enraged_camel wrote: post #47
pyrophane wrote: post #13

Instacart 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 aroun…

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 Instacart where the percentage is high, but there are many other baskets where the percentage is low.

Re: What is Instacart really charging? the breakdown

#70

Post by grandalf »

jon2k17 wrote: post #29
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.

Isn't that what Instacart is doing I.e bringing it to your door the same day, which I presume is much more costly?

Yes. Not sure why people don't see this.
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