
Instacart Launches Costco - apoorvamehta
http://thenextweb.com/insider/2013/04/22/instacart-adds-costco-to-its-same-day-grocery-delivery-service-and-you-dont-need-a-membership/?utm_source=Twitter&awesm=tnw.to_e0XQl&utm_medium=Spreadus&utm_campaign=social%20media
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ianb
Can someone tell me how exactly Instacart is working this? Do they have an
agreement with Costco? (I'm guessing not.) Do they have individual shoppers
who just do their thing as though they were individuals, and then deliver? Are
those individuals employees or freelancers?

I'm guessing Costco would be a bit reluctant to formally allow something like
this, as I also presume that one reason they get lower prices from suppliers
is that they only sell to members, so there is less of a perception that a
supplier is undercutting other retailers by letting Costco sell at a reduced
price. A sort of price discrimination... but if stuff gets resold without a
markup to bring the price in line with other retailers it would make their
negotiations more difficult.

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thetrb
I don't know the answer to your question, but isn't Instacart free to resell
anything they bought at Costco? So would they even need an agreement from
them?

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filmgirlcw
Because Costco is a paid membership service. I assume reselling is against
their membership agreement. It'd be difficult to enforce, especially on the
scale they probably operate at, but still.

EDIT: It's not. I somehow assumed it would be. Interesting to know it isn't.

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cleverjake
Former Costco employee here - nope. A lot of the point of the store is
reselling large items to small companies. Not many families need gallon jugs
of butter or 100lbs bags of rice, but tons of restaurants do.

That being said, the reselling is normally for people who do something with it
(ie cook the food, print with the ink, etc), not turn around and sell the
exact same product.

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rdouble
When I lived in the Mission the guys who ran the bodega across the street
bought half the stuff they sold from the SOMA Costco.

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mattlong
I used Instacart for the first time yesterday to have Trader Joe's delivered.
It was awesome! Their website shopping experience could use a little TLC, but
other than that it was solid.

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apoorvamehta
Thanks! Would love to hear your feedback: happycustomers@instacart.com

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rdl
Wow, this is awesome. It works even better for Costco than most places since
Costco inventory is fairly consistent, so ordering in advance is fine.

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lelandbatey
As someone who lives outside the valley, I feel so weird seeing articles like
this. I think they bother me because they illustrate just how much this whole
universe of tech is totally rooted in a single geographic area.

In anything else, changes in a business that had such a tiny area of influence
would not make the news next to stories on international business. I shouldn't
feel so bothered about this, but I do.

~~~
pg
Rooted in doesn't mean intrinsically limited to. Apple and Google are also
rooted in the Valley in the sense that their original users were here. But
anything sufficiently good becomes ubiquitous.

And incidentally, Instacart may well be such a thing. The effect it's had on
my life is almost entirely a function of having small children rather than
being part of the startup world.

~~~
lelandbatey
Having typed my previous comment on my phone, I think I'd like to expand on
what I was feeling:

When I read HN, I think of it as a place for news that appeals to the mind of
a "hacker". That's the "box" that it inhabits in my mind.

When I see posts like this one though, I'm reminded that there's a very large
bias towards things going on in a relatively small area or set of areas (SF,
NYC, Boston, Austin, maybe Seattle). I think my feelings on seeing this post
are just facing the reality of these natural biases.

Also, I'd like to say that these biases aren't a bad thing. It's natural when
lots of people with the same interests live in just a few places. But it does
exist, and it gives me a bit of a mental jolt when I run across them.

\-----

Also, I agree with the sentiment that "anything sufficiently good will become
ubiquitous." I've live(d) in the Seattle area all my life, and services like
Amazon Fresh are wonderful for more than just people living the startup
lifestyle.

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brianbreslin
How do they get the inventory of a costco if it isn't officially sanctioned by
costco? Do they buy the stuff on their corporate card then charge you on yours
and bank off the $10 fee? I don't live in an instacart location, so am not
sure how their biz model works (sounds like peapod).

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seeingfurther
I love Instacart... that is all. Please branch to NYC soon!

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lanstein
We in SF really do take for granted that we get all of these services at
launch.

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seeingfurther
Agreed. I'm moving to NYC and I'm realizing this fact just now knowing
Instacart isn't in NYC yet.

~~~
filmgirlcw
Instacart isn't but Fresh Direct is and is honestly usually cheaper, even with
delivery fees, than it would be buying from the local grocery store. And since
the city doesn't have many regular grocery stores -- in Brooklyn you have some
of the various NSA (National Supermarket Association) stores, but frankly most
of them suck. If you ARE lucky enough to live near a Trader Joe's (and keep in
mind, you'll need to be in walking distance or be willing to take the subway
with your bags), prepare for lines from hell.

I wouldn't go to Costco without a car -- and since you've really only got Long
Island City, the one in Brooklyn Heights and the one on 117th Street, traffic
is going to SUCK.

To that end, I'm not even sure if a thing like Instacart would work with NYC
because most of our grocery stores -- aside from Walgreens/Duane Reade and CVS
are local bodegas that you're lucky if they take credit cards, let alone have
a consistent inventory system. In the suburbs like Long Island or maybe parts
of Staten Island, but not in Brooklyn or in Manhattan (can't speak for the
other 2 boroughs but I assume Queens and the Bronx would be hard too).

Anyway, long comment short -- Fresh Direct. Oh, and ZocDoc for finding a
doctor. Those are the two startups (aside from Seamless and GrubHub) that
totally made my first two years in NYC.

~~~
seeingfurther
Thanks! That was super helpful! I'll be sure to check them out.

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nthitz
Hm interesting that you don't need an existing Costco membership. I hope they
are able to expand service beyond SF!

~~~
apoorvamehta
We plan to have Costco available as we launch other cities wherever it is
logistically practical.

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qiqing
This is excellent news for Chez JJ. Thank you Instacart, you just made our
hacker house network more scalable.

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mnicole
This alone would have me as a customer in Portland, but I agree with titlex
that forcing a signup modal before I can peruse the site is really unfriendly.

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ssing
In Portland you can use <http://www.indigomart.com/costco-products/> I had
added limit Costco & Bob Red Mill products few months back and I can try to
meet your needs. Try us out.

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mnicole
Awesome, thanks!

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lifeformed
Ugh I can't even look at the Instacart page without having to sign in. I don't
even live in the valley, I just wanted to check out their page.

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andyakb
Do the terms of costcos membership agreement allow them to do this, or did
they negotiate a separate agreement?

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niggler
"the fee associated with delivery from its stores will be higher, clocking in
at $9.99 for your collection of items, stiffer than the normal $3.99 rate."

I'm sure Costco is getting a portion of that fee.

~~~
benatkin
I'm not. It takes a long time to make it through a Costco, and the higher cost
may simply be passing on the extra labor cost to customers. Also I think the
distance to travel would be longer on average than, for example, Safeway.

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titlex
Why do they force you to sign up? That could potentially turn away customers.

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fomojola
Probably the increase in revenue from having people signup is more than (or is
expected to be more than) the loss from people opting out. They look like
they're doing well so I'll assume it is working out for them.

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rdl
Will you deliver non-food items from Costco? Are there weight/size limits?

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kategleason
as a user I have never been more excited!! this is so awesome :)

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pyrocat
Hurry up and come to Seattle!

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ttrreeww
So.. it's 1999 again?

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pg
What?

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zachlatta
I think they're referring to the dotcom era when other companies tried same-
day delivery.

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reaclmbs
Oh my god. If this includes berry ice cream delivery I will be a happy man.

