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Comment by octernion | Hacker News Reader

i am very confused why you have a higher bar for this than other services. would you actually create a spreadsheet that values your time (against other alternatives), gas/lyft/train fare to and back from the store, the extra costs associated with actually being in a retailer (and seeing the specials in store etc) and compare that against our offering?

and again, we aren't the ones doing the markup -- those are coming from the retailer directly, who may (or may not) mark up prices, which is their prerogative. we put all of our costs in the checkout screen transparently.

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>> and again, we aren't the ones doing the markup

So you claim, but since you refuse to list what the IC markup is then it's impossible for us to tell. You're essentially using the retailer markup as an excuse to hide instances of when you do it yourself.

Thus the lack of transparency.

In any given transaction, I have NO idea what the actual % that was added by IC. I do not have this problem with Amazon Prime.

again, in 99.99% of the cases, we aren't doing the markup.

and, in the one case where we do not have a signed relationship with the retailer, we do explicitly note the percentage.

we aren't hiding anything. and, you have that precise problem with amazon prime -- what markup are they charging?

If any markup exists, and if Instacart splits some of that markup with the retailer, it seems like obscuring the facts to state that Instacart does not charge a _separate_ markup.

> again, in 99.99% of the cases, we aren't doing the markup.

I find that hard to believe. That's the retailer markup? So you're just relying on the 0.01% (I know, arbitrary) where you do, and the opt-out $10 Service Charge to make money?

Are you responding to the same screenshot that tfehring is commenting on? https://imgur.com/a/j47ls It says:

> "A mark-up is added to item prices at this retailer to cover the cost of the Instacart service. Prices are based on data collected in store and are subject to delays and errors."

There is no good, ethical reason why a delivery service should show me an item price that's different from what's in the store. It's completely ethical if the company wants to say, "The service fee for this store is X% (as a percent of item prices)", or "This store has an additional $X service fee". That is honest and reasonable. I expect a delivery service to quote me the same item price as the retailer quotes in its store.

The reason I have this preference is because of a delivery service's value proposition: shopping in my store, on my behalf. I have access to the same products and can buy them directly. So I want to directly consider the service's value proposition, by considering the service fee I'll need to pay versus buying things myself. (EDIT: Simplify)

as i have noted elsewhere in the thread, that is a message -- from the retailer -- that the prices are different from in-store (and again, online pricing is their prerogative).

instacart is not marking anything up.

edit: it seems clear that we can do better in terms of communicating this, so i've passed that feedback on to the team.

That's in no way relevant. I want to know how much more it costs to use Instacart vs going to the store, and I don't care what their costs are just what mine are for using the service.

some constructive feedback: i had no idea that the markups were from/by the retailer, as opposed to instacart.

consider changing the messaging there? until now, i was under the impression that the markups were just another way for y'all to make some money off of me.

Why is it that grocery stores charge an Instacart shopper more than a regular customer? What extra work does the store have to do for the Instacart shopper that they wouldn't for a regular shopper?

Intuitively it seems like the store should be more incentivized to offer lower prices to Instacart since they provide a steady stream of business, reliable payment, etc.

Shh, its the cost of the kickback they are trying to talk past. Its just another fee.

Eh, their shoppers sound dumb from the anecdotes here, are likely tending to be picking up larger orders a lot, and generally plugging up the store at a higher rate than other shoppers.

Thanks for the clarification. I always assumed that this markup was from instacart and not the retailer. I guess I always found this very frustrating because instacart always says “we’re super transparent” but they never actually tell you what the mark up is. I guess instacart doesn’t even know what the markup is, which would explain why it isn’t communicated.

Excellent - so it's not a lack of transparency, but bad copywriting/marketing.

The paragraph reads like IC is responsible for the increase, not the retailer itself.

No, I wouldn’t perform that calculation exactly and explicitly - but I absolutely think about my purchasing decisions in that way. I can give you ballpark estimates of how valuable my time is, how much time it takes and how much it costs to physically go to the grocery store, etc., and give you a ballpark breakeven point. I’d probably pay $20 for a grocery delivery, but I probably wouldn’t pay $50. But I have no idea where the all-in cost of the service actually falls, so I can’t compare. And I do hold other products and services to that same standard - for example, I regularly compare prices between retailers, except for trivial purchases for which comparison shopping isn’t likely to be worth my time.

As for the source of the markups, that really doesn’t matter to me. I care about the total difference in cost between using Instacart and going to the grocery store myself, irrespective of who that additional money goes to.

thank you for context, and sorry if i sounded snippy in my response.

i was mainly noting the source for markups as we cannot tell you that delta -- it's up to the stores to tell us what they want to charge online. we do want to be as transparent as possible! ("possible" being the operative word here)

No problem at all - thanks for sharing your perspective. It’s helpful to know that grocery stores themselves are responsible for those markups, not because it affects the value that the service creates for me now, but because it impacts how the service could evolve in the future. If Instacart is currently subject to higher-than-retail prices, there’s even more room for it to potentially benefit from setting up its own warehouses, relationships with wholesalers, etc.

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