Postmates Business Model and Revenue Sources Explained

We live in a world where quality over quantity matters and convenience over hustle is preferred – and for the convenience that Postmate has been providing to the users out there, it has created a fandom of its own. 

Everyone who has given Postmate a try must have thought about how this delivery service exactly works? Not only this, people who wish to get a same app like Postmate are always looking for valuable insights like how much revenue the app is generating and many more. 

Well today is your lucky day as we dedicated today’s guide to Postmate. So whether you are a hungry user, or a curious investor, here is your ultimate guide to Postmates. 

What Is Postmates Business Model?

While using the Postmates, one might think that the “behind the scenes of the app” are kind of complex ones – but believe us, it’s business model is super simple. The company leverages a network of couriers to deliver goods from a local merchandiser to their customers. 

Customers obviously order whatever they need from the Postmate app of the website, couriers get notified about the customers needs, they pick up the relevant item and deliver – as simple as that! 

Postmates generate its revenue by charging delivery and service fees from its customers for every order they place. The delivery fee is expected to be around $5, whereas the service fee is fixed at 9% of the total value of the order. 

Not only this, As Postmate is bringing business to the merchants too, it charges a commission fee of about 18 to 33% for every order from them. 

How Postmates Generates Revenue? 

Being developed by a leading iPhone app development company, Postmate is generating incredible revenues. We figured out that people want to know in depth details of how Postmates Generates revenue. Well, there’s three ways to how it gets its revenue: 

• Charging Delivery Fees and Services charges

Just like any other app,the rate for the delivery fee depends on the distance between the pickup and delivery locations. On average, one can expect the delivery fee to be in the range of $0.99 to $9.99. 

In addition to the delivery fee, Postmate also charges service fees that range from 9% to 15% of the total order value. This service fee covers the platform cost that mainly includes providing people with 24/7 customer support and courier payouts. 

• Partnership Programs and Advertising Revenue

Since Postmate has become a renowned delivery system, many restaurants and local carts have partnered with Postmate to get brand recognition and more customers. 

These restaurants get a chance to showcase their active deals, promotions or discounts to customers via Postmate, which helps them bring more revenue to their business. 

Not only this, the advertisements you see on the app are also helping Postmate to generate revenue. These advertisements are mainly added using Flutter framework and are done for merchants who want to promote their products and services to a wide audience – and since Postmate can give them brand visibility, it charges for each advertisement it runs. 

• Subscription Service and Other Revenue Streams

This might be a new detail for people! Postmate offers its users with a premium subscription that is called Postmate Unlimited. This premium subscription allows customers to get all of their orders on free delivery – that too by only paying $9.99 monthly to Postmate. 

However, this is only applicable for orders that are above $12, which means that if you have Postmate Unlimited and you order something for less then $12, you would need to pay the delivery fee for it, smart move right?  

The subscription fee model has proven a successful one for Postmate as researches show that in 2022 the app got over 400,000 subscribers – you can do that math about numbers in 2024! 

What’s PostMate Marketing Strategy?

PostMates marketing strategy relies on mainly 3 factors: 

• Social Media Marketing

Postmates leverages the power of social media giants like Facebook, Twitter and Instagram to promote its services. Regular posting, using relevant hashtags and running ads on these platforms have helped Postmate get an incredible online presence. 

• Referral Program

Postmate has a referral program that encourages the existing customers to bring new customers to the platform and get paid for it. This has resulted in bringing loads of action on Postmates platform .

• Partnership With Local Businesses

Partnering up with local businesses have brought loads of profit to Postmate. People who don’t know about Postmate, but are ordering from a partnered restaurant are indirectly utilizing Postmate delivery services – eventually making them a Postmate’s customer. 

Final Thoughts!

Well we all have used Postmate to get our goods delivered to us, however not many of us knew how it actually provided its services to the world.

If you managed to read to this end of the article, then now you know insights to the business model of Postmates. 

If you wish to get an app like Postmate that can help you generate heap of profits, get help from a leading mobile app development company like Appingine.