A Step-by-Step Guide: How does Postmates Work?

Postmates is an application where you can order ‘anything from anywhere’. That is what Postmates endorses, their ability to deliver not only your dinner but anything and everything else you need.

This delivery and logistics company was founded in 2011 by Sam Street, Sean Plaice, and Bastian Lehmann. It has its headquarters in San Francisco, California. Postmates wanted to provide a platform to small businesses to compete with giants like Amazon. With the arrival of such online services, it has adversely affected small businesses. In December 2014, Postmates launched its Application Programming Interface for the merchants to register. This would benefit them by expanding their availability.

Postmates grew immensely in 2015 and now has a large fleet of couriers delivering orders across the US. Let us see how does Postmates work & make money. We will also explore it’s revenue sources and business model.

How Does Postmates Work?

Postmates as an application connects three major groups. The consumers, merchants and the couriers. Let’s understand how all of these are benefitted from Postmates and how does Postmates work for all of them specifically.

Consumers: Consumers are the end recipients and primary users of the application. They place orders and get things delivered to them in an hour. It saves time and effort to go shopping and makes ordering food easier.

Merchants: Merchants of small business and restaurants get exposure through these applications. With Postmates they can reach a wider audience and scale up their sales. These merchants partner with Postmates and complete orders from consumers passing it on to the couriers.

Couriers: Couriers are the people who buy and deliver orders from the merchants to the consumer in an hour. These couriers receive a notification when a consumer places an order and they go buy the items from the stores and complete the order. They receive 80% of the delivery fee and 20% is kept by the company.

How Does Postmates Work For The Consumers?

Here is a stepwise model to explain how does Postmates work for the consumers. This will give you a better understanding of how user-friendly it is and how it makes your life easier as a consumer.

Step 1: The Add-to-cart Saga

In the first step, the consumer browses the variety of stores and products available to them. They can create a cart for all the products from particular stores that are required.

Step 2: Check Please!

Once your cart is ready the application redirects you to the check out page. Here you have to make the payment for your order through various online payment options available. Once the payment is received your order is placed and you can now sit back and relax for it to come to you in an hour.

Step 3: Who’s Available?

Once your order is placed, a notification is sent to the nearest delivery person who is available near your location. This delivery person now has to go to the particular stores selected, buy the items and deliver them to you in an hour. All the couriers travel by either a bike or a car. The delivery person can also message the consumer in case of any delays.

Step 4: Where did you reach?

With Postmates, consumers can track the order life and see where the delivery person has reached yet. Apart from tracking orders, the last step also comprises of receiving orders. This will be the end of the entire cycle and tips given to the delivery person.