Amazon’s (NASDAQ: AMZN) prime service is no facing a challenge from a startup company, Postmates Inc. which now posts its service targeting at the logistic business that works similar to Uber. U can be the operator of this company just to earn a pocket money by helping others deliver the goods on the way to your destination.
Postmates Inc., is taking direct aim at Amazon’s $99-a-year membership with an unlimited service of its own. For $9.99 a month, customers can get unlimited delivery of prepared foods as well as some other merchandise in less than an hour from thousands of stores in about three dozen cities, provided orders are at least $30.
Postmates said the service, called Plus Unlimited, has about 3,000 merchants involved nationwide. Orders of burritos, candles or T-shirts from area merchants cost the same as buying them in-store and carry no additional service fee, Chief Executive Officer Bastian Lehmann said.
“We’re a delivery company, but we want to become a utility for local commerce,” Mr. Lehmann said. “Anything that people want to order locally, we want to be able to bring it to them.”?
Amazon has a sizable head start, with an estimated 40 million Prime members, a network of warehouses close to urban centers and more than 10,000 items eligible for one-hour delivery. The Seattle retailer promises drop-offs in two hours for no additional fee above the Prime membership price—it is $8 for an hour or less—and more quickly for prepared food orders. The huge spending on build its own warehouse and logistic system by Amazon is now seeing the new competition from Postmates for its internet technology.
For most orders, Postmates charges customers $5 to $20 per delivery, including service fees, depending on the turnaround time and complexity of the order. It also collects a fee from merchants, based on the transaction price. Also, Postmates has also been working since at least last summer to develop a delivery service with a $1 fee, which would rely on combining many orders from one merchant and dropping them off at nearby locations. It introduced a flat $2.99 to $3.99 delivery service last month called Plus, with the same set of merchants offered in the new unlimited program.
Mostly, the deliver would be the food. But for this market, the competitors have already been in the game. For this part of the business, Postmates is likely to face a much more difficult task.
Delivery firms such as DoorDash Inc. and Square Inc.’s Caviar, among others, which have targeted the prepared-food market. Uber Technologies Inc. recently implemented a $1.50 delivery charge in San Francisco for its restaurant-delivery service after initially offering it free.
Postmates has raised about $138 million in total, giving it a valuation of more than $400 million, as of last June. It recently retained investment bank Qatalyst Partners to help with fundraising, a person familiar with the matter said.