How Does Postmates Work? Business Model And Earning Revenue Explained

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How Postmates Work

Before analyzing the operating of Postmates, let us known and understand what exactly is Postmates? 

Postmates is the first application to deliver whatever you want when you want it. This app delivers anything from your favorite restaurant or retailer in minutes. You can choose to meet your post mate at the door or even you can choose non-contact deliveries left at your doorstep. 

It is a delivery application just like UberEats, Grubhub that allows you to order food from your phone and have it delivered to your door. If you are a frequent Postmate customer to avoid any of the delivery expenses you must consider signing up for the Postmate unlimited. In the past few years, food delivery apps like UberEats and others have become the go-to especially when you just don’t want to leave the house. Postmates business model was founded in San Francisco in 2011. The app was designed to be a “remote control for the city” that allowed food and other services delivered to your doorstep within an hour. Let us have a look at how this app works.

Working of the Postmates

One of the best things about postmates is that it is not just for food delivery. The idea behind the invention of Postmates was that you can get the delivery of anything at your doorstep without any haste. You can order from certain grocery stores, pharmacies, and even electronics and liquor stores, depending on where you live and which nearby stores are available. It is worth noting that this app is way more expensive than other delivery apps, delivery charges ranging from $3.99 and $5.99, and with that, they also charge a 9% service charge. Other charges include cart-fee which is approximately $1.99 if your order is below $12 or $10 if you are in Los Angles. However, if you are a frequent user of this app, you can sign up for Postmate unlimited and save yourself a lot of money. You can get Postmate unlimited for $9.99 a month that gives you unlimited free delivery from any partner company or merchants as long as you are placing an order that is above $12. Postmate unlimited members also get extra benefits like exclusive offers, access to giveaways and events, and also the best is- no delivery hikes on orders under $12, even during peak hours. Let us now analyze how to use this app. 


How to use Postmates?

Using Postmate is as simple as using any delivery application. First and foremost you will be required to download the app on your iPhone or Android phone and then you will be required to create an account if you don’t have one.

Secondly, you will be required to scroll the main menu when you open the app. You can make use of the Tabs at the top to select if you would like to order delivery or pickup. 

You can also make use of the party option which rewards you with free delivery for ordering from businesses that are popular at that moment. These orders are timed and you only have a few minutes to secure your free delivery before the list is updated. 

You can make use of the search bar in the top right corner of the app if you want to be specific with your search. For instance, you want to look for “Thai cuisine”, for the same you can type it in the search column and you can also be specific with the details of the restaurant. 

To have a look at the account information and other details like your recent orders, promos, or support, you can tap on the account icon in the top-left corner. And, if you want to change the information and details of the account be it your personal information, your card details, or your address, you can tap on the settings button in the top left corner of your account menu. 

Let us have a look at the other silent features of the Postmate

  1. It helps people to order anything from anywhere within the city.
  2. The delivery guys who work for Postmate are also called Postmates.
  3. The deliveries are made within an hour.
  4. Postmates is available 24 hours a day and 365 days a year, this feature differentiates it from several other delivery apps which are sometimes down for several reasons. 
  5. The minimum delivery fee charged is $5 but often there are offers in particular areas with even lower delivery fees.
  6. Customers have the option to track the location of the delivery guy from the app.

There are broadly 3 segments on which the Postmate business model is based.

  1. Customers- These are the people who are willing to spend a little more than the actual price of an article or product to get it delivered.
  2. Merchants- Postmate ties up with a lot of local merchants that provide these merchants with a platform with an opportunity to reach out to people who want goods delivered to their doorstep. These merchants are comfortable with paying a small amount of total billing for their delivery service.
  3. Delivery persons- These are the people who want to make money by working according to their schedule. These human couriers are called Postmates. According to this business model, the delivery person gets 80% of the delivery fee and the rest 20% is kept by the company. 

Postmate business model

Postmate earns revenue from three main revenue streams, those streams are delivery fee, Convenience fee, and merchant program. The company keeps the profit and errands from all three segments and that is how it makes revenue. 

The other thing you need to know about Postmates is that they often run promos, both for free delivery and discounts or free trials of their unlimited service, so be on the lookout for those. To make one such business model is a great deal but having one such model can help you grow your business in ways you never thought of. To get your business one such model you can seek help from Leciel Technologies

If you have any query or question regarding how to build one such model and make money out of it, you can contact

Ravi Sharma
Ravi Sharma
I am passionate about content writing. I write articles for businesses that want to see their Google search rankings surge. My articles focus on balancing informative content for the website that helps businesses to connect with customers through content online. Find more about digital marketing concepts here that could grow your business.
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