Watch out, Mr. Bezos and Amazon Prime. There’s a new subscription delivery service in town. This week Postmates launched a Plus Unlimited subscription, an on-demand one-hour delivery service available in select U.S. markets. Prior to adding the subscription service, the company delivered local goods to customers through their Postmates Plus service for a flat delivery fee of $3.99.
For $9.99 per month, Postmates subscribers get free delivery on all orders over $30 from more than 3,000 Postmates Plus merchant partners. There are no service fees for restaurant or retail deliveries, sign-up on the Postmates iOS app is easy, and subscribers can cancel at any time. (Android is coming soon.) As an added bonus, all of Postmates’ merchant partners, their staff, and senior drivers and riders will get Plus Unlimited for free.
“With our Unlimited subscription we’re now taking the next step in becoming a utility. Removing delivery and service fees for purchases creates a level playing field between local delivery and in-store purchases,” said Postmates on their blog.
“In addition to having access to all of the best local restaurants in your city, Unlimited provides access to delivery from retail partners like American Apparel, with no fees. The future of Plus Unlimited is greater diversity of places, across retail, convenience, beauty and more,” Postmates added.
Is this a big deal? With a fleet of more than 25,000 Postmates making 1,000,000 deliveries a month in cities across the country, Postmates thinks so. In addition to this volume, the innovative delivery service has driven more than $350 million in sales to local economies through March 31, 2016.
How does Postmates differ from Amazon and Amazon Prime? Rather than trying to be everything to everybody, Postmates focuses on local economies – local merchants, drivers, riders and customers in select markets – in major metro markets like Seattle, Chicago, Philadelphia, Boston, Phoenix, Miami and Denver.
In an interview with TechCrunch, Kristin Schaefer, VP of Growth for Postmates, said their philosophy is counter to Amazon’s mission with warehouses.
“Over years, we’ve done a lot of time looking at Prime and trying to understand it and thinking about how the model can work for us,” Schaefer told TechCrunch. “The goal is to make local inventory that’s offline and even online really accessible in every city.”
What’s next? According to TechCrunch, Postmates has raised $138 million in funding thus far, and it is on track to be profitable in 2017. In addition, the company is working with investment bank Qatalyst Partners to advise it on additional funding and potential sale opportunities.
We love Postmates’ vision and philosophy in focusing on local business – a niche that Amazon has not, and perhaps cannot, master. Postmates has followed Amazon, seen what works, and carved out their own niche in their own way. Based on their funding, statistics and profitability time line, Postmates is making progress.
Postmates has also followed some industry best practices which has helped the company be successful. They started with a core product and added to as they became more familiar with what their customers wanted, first adding the Plus service and now Plus Unlimited which will give the company recurring revenue. Because Postmates’ product platform is technology-based, the company has to be nimble, but it is growing and adapting at a reasonable pace, building on its successes. We can’t wait to see what’s next.