GoPuff Business Model and Revenue Channels Explained

Quick Summary: GoPuff is an Instant Commerce platform that provides various solutions under the platform. From food to grocery, alcohol, grocery, and more, users can enjoy home deliveries within a few minutes. Discover the GoPuff business model and how you can build a similar platform with this comprehensive guide.

The on demand delivery industry has made everything possible and more accessible. From food delivery apps to grocery delivery, alcohol delivery, medicine delivery, etc., users can now get everything at home and whenever needed.

But imagine that instead of downloading different apps for each category, you get all these from one single platform. Yes, that is possible. GoPuff is an Instant Commerce platform that enables the delivery of food, groceries, gifts, alcohol, snacks, quick meals, and much more within 30 minutes.

As an entrepreneur, you must understand that this is the exact solution the target audience needs today. If you want to build an on demand app like the GoPuff business model, you are at the right place.

This guide will help answer all your questions regarding the GoPuff business model, how it makes money, the steps to build an app like GoPuff, and its development cost.

Let’s begin by understanding the GoPuff business model and its history in a little more detail.

GoPuff History- How Did the Idea Arise?

Yakir Gola and Rafael Ilishayev, two Drexel University students tired of doing errands for their friends, started Gopuff in 2013. Both Gola and Ilishayev had hectic schedules as students, so they frequently had to perform errands for their friends, including getting groceries or delivering parcels.

They came to the conclusion that a practical and dependable delivery service was required, one that could provide a large range of items, including groceries, alcoholic beverages, and household goods.

Gola and Ilishayev started out by bringing hookahs and other products from convenience stores to students living in dorm rooms. As soon as they saw that there was a big need for their service, they started to broaden the range of things they were supplying. They also began to deliver to additional Philadelphia neighborhoods.

Headquartered in Philadelphia, as GoPuff began to get funding, the platform expanded with a wide range of services. It is now one of the leading on demand delivery services, delivering to over 650 cities across the United States and Europe.

In the UK, GoPuff has acquired two apps, Fancy and Dija, to expand its presence there. 

GoPuff Business Model- How the Platform Works?

To build an app like GoPuff, you must understand its business model in detail. Learning how the platform works will help you develop a perfect solution for your target audience.

1. On Demand Delivery Platform

GoPuff is an on demand delivery company that provides users with quick access to a wide selection of products via its website or mobile app. With this strategy, customers may order various products and have them delivered right to their door, satisfying their need for rapid satisfaction.

2. In-House Warehousing

Unlike some of its rivals, GoPuff usually oversees its own warehouses, resulting in a streamlined and well-managed supply chain. With this strategy, the business can keep a well-chosen product inventory, which makes order fulfillment precise and fast. GoPuff can ensure its customers receive dependable and consistent delivery services by managing the warehousing process in-house.

3. Diverse Product Range

GoPuff sets itself apart by providing a broad range of goods that go beyond typical convenience store fare. Consumers can browse and choose from a variety of categories, such as gadgets, drinks, snacks, and household necessities. This extensive product line increases client pleasure by offering a one-stop shop for various daily requirements, all accessed via a single platform.

💡 Are you looking to create an app similar to the GoPuff business model? Connect with the ValueAppz team today to discuss the idea.

GoPuff Stats- Its Continued Growth

Why is GoPuff a popular app in the USA and UK? Since 2015, GoPuff has raised sufficient funding for its brand, allowing the business to expand quickly. 

Source: Statista

The GoPuff website is also very engaging. As of October 2023, it had a total visits of 2.6 million, with an increase of 2.05% compared to the previous month.

Source: SimilarWeb

Additionally, Gopuff’s user base has grown significantly, with more than 3 million yearly active users as of January 2022, up from 1.8 million in 2020 and 300K in 2019. The company’s mobile application was downloaded 11 million times in 2021, up from 7.1 million in 2020 to 4.4 million in 2019. As of January 2022, Gopuff’s MFCs provided coverage for 30% of the United States population, and the company held 400 alcohol licenses across 30 states. 

These developments have resulted in the company’s estimated 73% market share in the first-party convenience delivery market.

Steps to Build an Instant Commerce Platform Like GoPuff

To build an app like GoPuff, you can follow the steps below. This section explains in detail how you can create a similar platform and engage the target audience with your services.

1. Market Research and Analysis

Your process must begin with conducting comprehensive market research. It will help you understand the current demand for on demand delivery services in your area. It will also help discover the gaps and specific customer needs that are still not fulfilled. Further, your research must also include analyzing competitors, their strengths, weaknesses, and customer feedback.

2. Strategic Planning and Conceptualization

Clearly define your app’s approach based on your findings. List the essential features you wish to have, such as secure payment gateways, a robust order management system, effective delivery logistics, and user-friendly product browsing interfaces. Think about the technology you will need to incorporate and develop into the application, such as secure data storage, push notifications, and GPS tracking.

3. App Design and Development

Once you align your app idea, you need to design the app in a way that attracts the target audience towards the services. You can hire an on demand delivery app development company to help you create a design that aligns with your brand guidelines. Also, the company will help you develop an app like GoPuff with the latest technology, ensuring its quality and success.

4. Logistics and Fulfillment Setup

As explained above, GoPuff has its own warehouses and delivers the products directly to its users. So, to guarantee effective delivery, create a network of strategically placed warehouses or micro-fulfillment facilities. Establish partnerships with distributors and suppliers to maintain a consistent supply of goods. Create a delivery network by working with a reputable delivery business or recruiting drivers. For real-time inventory management and order tracking, put in place a reliable order management system.

5. Launch and Marketing

Launch the app as soon as it’s ready. Use influencer collaborations, targeted advertising, and social media campaigns as part of a well-thought-out marketing strategy to promote your app. To draw in and keep consumers, provide loyalty programs, discounts, and promotions. To enhance the general user experience, collect feedback on a regular basis and make app updates in response to user comments.

👉 Want to build your app like GoPuff? Check out our complete guide to build an on demand delivery app.

Revenue Models- How Does GoPuff Make Money?

How does GoPuff make billions of revenue every year? The platform follows several revenue models in order to make money. This section will explain all the ways that GoPuff makes money.

1. Product Markup

The markup that GoPuff adds to its products is the company’s main income source. This business concept includes purchasing goods at manufacturer and distributor wholesale costs and then reselling them to consumers at a markup. The business’s profit margin is the difference between wholesale and retail pricing.

2. Delivery Fee

Unlike any other on demand delivery business, GoPuff also charges a delivery fee for its orders. Its delivery fee is usually a flat rate, regardless of the order size and distance for delivery. Its order fee is as low as $3.95, and an additional $3.95 is charged for orders containing items like alcohol, tobacco, and vaping products. The brand does not surge or hike prices.

3. Subscription Program

GoPuff’s Fam subscription charges $7.99/month with additional taxes. The subscribers get free delivery and more benefits. This method allows the brand to get a fixed income every month.

4. Advertising 

Another revenue model followed by GoPuff is the advertising fee. It lets the brands catch users’ attention with creative ads on its platform and, in return, charges a fee for it. It provides various advertising solutions like sponsored product placements, banner ads, and email marketing campaigns.

5. Partnerships and Collaborations

GoPuff has partnered with several companies and merchants to increase the range of products it offers and reach more people. GoPuff receives a commission for recommending products from participating companies or merchants under revenue-sharing agreements in these collaborations.

💡 Discover the top revenue models and strategies to make good money for your on demand delivery app.

Cost to Build an App Like GoPuff

When creating an app similar to GoPuff, it is essential to consider the cost. The development cost can range from $15,000 to $60,000 on average. The final cost will vary on several factors like app design, development team, platforms, number of features, etc. 

The more customized you want your app to be, the higher will the development cost be as it involves more time for the process. Hence, you must carefully consider the budget before you hire a team for your project.

Build Your App Like GoPuff With the Latest Technology

Are you inspired by the idea of the GoPuff business model and want to launch a similar solution in the market?

Rest things apart, you need a team of professionals who have years of experience and have worked on similar products. ValueAppz is one of the leading on demand delivery app development companies that have helped clients across the globe.

We ensure our clients get the exact product that meets their brand needs and helps them achieve their desired results. Our cost-effective solutions and no compromise with the quality are our greatest USPs.

Connect with us today, and let’s discuss how we can help your startup launch and grow.

Key Takeaways

• GoPuff is an Instant Commerce platform allowing users to get home deliveries for products like food, groceries, medicines, alcohol, tobacco, etc.
• Unlike its competitors, the biggest USP of GoPuff is that it does not hike or surge prices under any condition.
• The five steps to develop an app like GoPuff include market research, strategic planning, app design and development, logistics and fulfillment setup, and launching and marketing.
• GoPuff follows various revenue models to make money, including subscription fees, delivery charges, advertisement fees, collaborations and partnerships, and product markup.
• The average cost to build an app like GoPuff ranges between $15,000 to $60,000. However, the final cost can vary on several factors.

Frequently Asked Questions

Q1. How does GoPuff make money?

GoPuff makes money through various revenue models like subscription fees, delivery charges, advertising fees, product markup, and partnerships and collaborations.

Q2. What is GoPuff’s delivery model?

GoPuff uses a delivery approach that focuses on direct-to-consumer delivery of grocery and convenience products from their own network of nearby warehouses, allowing customers to receive their orders in minutes.

Q3. How does GoPuff monetize its platform?

GoPuff monetizes its platform through delivery fees and partnerships with various brands for product placement and promotions.

Q4. What is the GoPuff business model?

GoPuff is an instant commerce platform that operates like a delivery-based convenience store, giving customers easy access to a large selection of everyday goods and making money from delivery fees and brand agreements for product placement and advertising.

Q5. What is Gopuff, and how does it work?

GoPuff is an on demand delivery business that quickly delivers a large variety of groceries and convenience items from their nearby warehouses to their customers’ locations.