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Instacart (YC S12) wants to be Amazon with 1 hour delivery

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Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#61

Post by dclowd9901 »

cs702 wrote: post #21

I'd love to have this service at home, so I'm (selfishly) hoping Instacart becomes hugely successful! That said, I can't help but wonder whether the company will find a business model with sustainable economics. A lot of really smart people have tried and failed to accomplish this sort of thing before. For example, Amazon invested $60 million in Kozmo.com back in the late 90's, and they couldn't make it work. (Kozmo.…

I think to solve this problem, Amazon needs to bridge the gap between their value and local retailers' stock.

It'd work something like this:

You go online.

You want to buy a new A/V receiver

You find the one you want on Amazon at 9 am

Amazon then asks you where you live

Amazon taps into a database of willing stores that might carry the product. Most big-box stores have web-based inventory checks, so syncing their inventory with Amazon's system would (hopefully) be easier. Amazon offers the service to more specialized outfits; Smaller stores would get support in integrating the inventory system. Amazon would have to make a deal with these stores to make this work.

Using a partnership with UPS/FedEx/et.al., Amazon figures out which locations are still due for visits from a logistics company. Most make residential shipments as the last part of the day.

Amazon tells the store, "A customer requested this receiver, please put it in box size A1 and hand it to the UPS dude with this shipping label."

Amazon pays the retailer below retail, but above cost. The retailer takes it because they want the business; Amazon recoups because same-day shipping is a premium.

Box goes on the truck, truck comes to your house.

Voila, new item by EOD same day.

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#62

Post by marquis »

dclowd9901 wrote: post #61
cs702 wrote: post #21

I'd love to have this service at home, so I'm (selfishly) hoping Instacart becomes hugely successful! That said, I can't help but wonder whether the company will find a business model with sustainable economics. A lot of really smart people have tried and failed to accomplish this sort of thing before. For example, Amazon invested $60 million in Kozmo.com back in the late 90's, and they couldn't make it work. (Kozmo.…

I think to solve this problem, Amazon needs to bridge the gap between their value and local retailers' stock. It'd work something like this: You go online. You want to buy a new A/V receiver You find the one you want on Amazon at 9 am Amazon then asks you where you live Amazon taps into a database of willing stores that might carry the product. Most big-box stores have web-based inventory checks, so syncing their inv…

The bottleneck is the delivery: unless there are sufficient deliveries to be made in your neighbourhood, sending a van to just your house then back to depot is very expensive. For hundred-dollar-and-up items this works, but not for the kind of consumer goods that people want within an hour (food, namely). And for $9.99 for one-hour delivery, who is not getting paid very well here?

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#63

Post by freehunter »

aidenn0 wrote: post #58
apoorvamehta wrote: post #30

Earlier quoted context omitted.

While I agree that a lot of smart people have tried this before (Kozmo.com, WebVan, etc), I believe that there are significant differences in the approach that we are taking. Specifically, Kozmo.com was founded in an era where you could IPO without having profits. Having that mentality from day one allowed them to make huge concessions to users such as give them free delivery on everything, and not have a minimum ord…

It seems like by having a delivery fee is a non-starter. "I can get it in 2 days free with amazon, or $4 today... is that worth it?" People will spend huge amounts of time and effort to not pay delivery charges, even when the total price ends up being the same!

But then again, I can't count the number of times I've ran out to the store and paid more than Amazon prices because I didn't want to wait two days for shipping.

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#64

Post by rogerbinns »

marquis wrote: post #62
dclowd9901 wrote: post #61

Earlier quoted context omitted.

I think to solve this problem, Amazon needs to bridge the gap between their value and local retailers' stock. It'd work something like this: You go online. You want to buy a new A/V receiver You find the one you want on Amazon at 9 am Amazon then asks you where you live Amazon taps into a database of willing stores that might carry the product. Most big-box stores have web-based inventory checks, so syncing their inv…

The bottleneck is the delivery: unless there are sufficient deliveries to be made in your neighbourhood, sending a van to just your house then back to depot is very expensive. For hundred-dollar-and-up items this works, but not for the kind of consumer goods that people want within an hour (food, namely). And for $9.99 for one-hour delivery, who is not getting paid very well here?

The expense is mainly because of the driver. The moment self driving vans become economically feasible the delivery expenses will drop precipitously.

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#65

Post by sliverstorm »

rogerbinns wrote: post #64
marquis wrote: post #62

Earlier quoted context omitted.

The bottleneck is the delivery: unless there are sufficient deliveries to be made in your neighbourhood, sending a van to just your house then back to depot is very expensive. For hundred-dollar-and-up items this works, but not for the kind of consumer goods that people want within an hour (food, namely). And for $9.99 for one-hour delivery, who is not getting paid very well here?

The expense is mainly because of the driver. The moment self driving vans become economically feasible the delivery expenses will drop precipitously.

Are you just waiving fuel costs?

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#66

Post by rogerbinns »

apoorvamehta wrote: post #30
cs702 wrote: post #21

I'd love to have this service at home, so I'm (selfishly) hoping Instacart becomes hugely successful! That said, I can't help but wonder whether the company will find a business model with sustainable economics. A lot of really smart people have tried and failed to accomplish this sort of thing before. For example, Amazon invested $60 million in Kozmo.com back in the late 90's, and they couldn't make it work. (Kozmo.…

While I agree that a lot of smart people have tried this before (Kozmo.com, WebVan, etc), I believe that there are significant differences in the approach that we are taking. Specifically, Kozmo.com was founded in an era where you could IPO without having profits. Having that mentality from day one allowed them to make huge concessions to users such as give them free delivery on everything, and not have a minimum ord…

You also have another way of making a few more bucks here and there. Supermarkets often have coupons, and also buy one get one free type offers. The former can reduce the cost of goods to you, and the latter means you can charge two customers for an item but only pay for it once.

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#68

Post by personlurking »

dclowd9901 wrote: post #61
cs702 wrote: post #21

I'd love to have this service at home, so I'm (selfishly) hoping Instacart becomes hugely successful! That said, I can't help but wonder whether the company will find a business model with sustainable economics. A lot of really smart people have tried and failed to accomplish this sort of thing before. For example, Amazon invested $60 million in Kozmo.com back in the late 90's, and they couldn't make it work. (Kozmo.…

I think to solve this problem, Amazon needs to bridge the gap between their value and local retailers' stock. It'd work something like this: You go online. You want to buy a new A/V receiver You find the one you want on Amazon at 9 am Amazon then asks you where you live Amazon taps into a database of willing stores that might carry the product. Most big-box stores have web-based inventory checks, so syncing their inv…

There's an online used bookstore (Estante Virtual) in Brazil that kind of does this, though obviously with books. It's a network of 9 million titles, all coming from secondhand bookstores throughout the country who have uploaded a list of their inventory. When I browse for a book, I can choose a local vendor and if I want, find out the location so that I can just go there in person if I think that's faster than Brazil's national courier services (as many times, payment to the vendor means making an in-bank deposit to their account).

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#69

Post by jontas »

dclowd9901 wrote: post #61
cs702 wrote: post #21

I'd love to have this service at home, so I'm (selfishly) hoping Instacart becomes hugely successful! That said, I can't help but wonder whether the company will find a business model with sustainable economics. A lot of really smart people have tried and failed to accomplish this sort of thing before. For example, Amazon invested $60 million in Kozmo.com back in the late 90's, and they couldn't make it work. (Kozmo.…

I think to solve this problem, Amazon needs to bridge the gap between their value and local retailers' stock. It'd work something like this: You go online. You want to buy a new A/V receiver You find the one you want on Amazon at 9 am Amazon then asks you where you live Amazon taps into a database of willing stores that might carry the product. Most big-box stores have web-based inventory checks, so syncing their inv…

Isn't this sort of the way those flower delivery sites work? You purchase some arrangement online and then a local retailer puts it together and delivers. So this model already exists and is (presumably) successful. I'd sure love to see it rolled out to other industries.

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#70

Post by msbarnett »

rogerbinns wrote: post #64
marquis wrote: post #62

Earlier quoted context omitted.

The bottleneck is the delivery: unless there are sufficient deliveries to be made in your neighbourhood, sending a van to just your house then back to depot is very expensive. For hundred-dollar-and-up items this works, but not for the kind of consumer goods that people want within an hour (food, namely). And for $9.99 for one-hour delivery, who is not getting paid very well here?

The expense is mainly because of the driver. The moment self driving vans become economically feasible the delivery expenses will drop precipitously.

And customers will, what, walk out to the robovan and dig through the boxes until they find theirs?

Paying a guy to sit in the robovan and run the packages to the door isn't going to be appreciably cheaper just because he sits in the passenger seat.

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