Delivery Services are, by now, an old concept with too many players

The New York Times ran an article titled “Delivery Start-Ups Face Road Bumps in Quest to Capture Untapped Market” on Thursday, February 11, 2015. Mike Isaac wrote the piece.

We tried Amazon Pantry and dropped it. The problem wasn’t the delivery. Item pricing was the real issue. We couldn’t purchase the products we wanted from Amazon at any where near the local market price. Qts of Yoghurt, Soy Milk and a type of chopped dates (rolled in oat flour) were readily available from local sources at substantially lower cost. Since “local”, worst case, for our household amounts to a 16 mile ride, we found ourselves dropping the home delivery service and continuing our trips to the local grocers.

The real barrier to entry is the tight hold local grocers have over items in high demand. Once services like Amazon Pantry can break this hold I imagine we (along with a lot of other households) will purchase through them and get back to the home delivery benefit.

The driver churn Isaacs describes in his article is certainly a factor from the “production” side of this business model, but the real obstacle is the crucial price and availability benefit that any commodity business model needs to possess to be a real winner. Sad to say, this benefit just isn’t there for our household and, in all likelihood, a lot of others.