How does Instacart make money?

Instacart has become a very successful and dominating company in the grocery delivery market space. Since March 2020, the beginning of the Covid-19 pandemic, Instacart has captured 50% of the online or app-based grocery delivery service market.

Instacart has had a lot of success since it partners with local, regional, and national supermarket and grocery store chains to deliver the store's products to customers.

Here are some more details on how Instacart makes money:

• Revenue sharing

  This is accomplished by Instancart charging a commission on every order that a user places on the app. Although, the commission fee is charged to the retailer, not the app user.

  Instacart has a revenue-sharing agreement with its supermarket and grocery store partners; the rates are variable and depend on the store's Instacart transaction amounts.

• Delivery fees

  Delivery fees are another way Instacart makes money. They charge users of the app a fee for every completed delivery order.

  The standard delivery fees for orders above $35 are $3.99 for a scheduled or two-hour delivery and $5.99 for a one-hour delivery. Orders below $35 are charged $7.99 for a scheduled or two-hour delivery and $9.99 for a one-hour delivery.

• Premium subscription fees

  Instacart Express is another way the company generates profits. This is a paid-version off-shoot of the free version of Instacart.

  They get money from users who want to become members at a monthly subscription charge of $9.99 or an annual charge of $99. Members don't pay delivery fees on any orders of 35$ or more.

• In-app advertising

  Instacart has almost 10 million users in the United States, meaning they earn a lot of money from advertisers looking to promote their products and services on the app. Some common advertisements on the Instacart app include Amazon and Etsy.