What Every Instacart and Shipt Shopper Need To Know About Their Pay
As soon as Instacart lowered their customer pricing strategy, the impacted shoppers began decrying incredulous earnings that demonstrated some jobs were clearly not even worth the vehicle maintenance costs for one shop. Less than $5.00 earnings estimate on a job (shop) and that’s with the tip!? Yep, in some cases that seems to be happening.
However, no shopper has to accept every batch they receive. That’s a shop in Instacart language. You get an alert that one is available, and you have so many minutes to accept it. You can see the estimated earnings, how many items the customer ordered, and even the distance you’ll have to drive. This is the transparency that shoppers have been asking for. Instacart also made these changes to customer costs and are making it less noticeable for the customer as to how much grocery delivery truly costs.
Remember we’ve already covered the true costs of grocery delivery in a prior blog post, but if you consider Kroger’s $4.95 fee for curbside pickup, then Instacart isn’t any different than an upscale grocery store that you actually shopped at (like Wholefoods). They gain more customers every day so I imagine this will not be the last time we hear they are lowering costs. They get to bargain with their customer’s data after all. And you thought Facebook was awful: and it’s free. Is it?
As a shopper for Instacart or Shipt, the way you boost your earnings are easy:
- Remember that customer service is your focus.
- The faster your service the more you earn.
- Do not accept inadequately priced batches.
I give my top ten ways to increase your Instacart and Shipt pay in another post. Go check those out, you’ll be increasing your earnings in no time. I’ll briefly touch on these three to support the analysis that follows.
Customer service is the easiest thing to tackle and yet it will make the most impact on your bottom line. If you
Accepting multiple batches is the only way to double your money. Doing three batches in one store can be challenging but can be done as long as you are organized, have your cart and vehicle “zoned”, and you are fairly seasoned. Instacart makes those types of batches fairly straightforward but Shipt will require you to map out the stops, so if you have a spare phone for maps that would come in handy.
I don’t think we need an explanation of not accepting inadequately priced batches. My best recommendation is this: THINK LIKE A DATA SCIENTIST. That’s right; when you see cheap batches, think about how that will look in data and how the Data Scientists are sitting in the Instacart Headquarters getting ready to show their precious data to the boss. “Hey Boss, we’ve noticed a downtic in batch acceptance for Express Orders.” They’ll let that go on long enough until they do one of three things: 1. Increase the % earning for a shopper on express orders, 2. Charge customers higher service charges for orders with less than ten items, or 3. Raise the markup (per item) on customers who only order a few items. As long as a shopper is willing to accept a batch with less than $8 earnings then they will continue.
Here is the important point for an Instacart or Shipt Shopper: you should understand Instcart’s and Shipt’s fee structure and markup to understand your pay. As a business owner, it is your responsibility to understand the financial backbone that becomes your income. If you think that all grocery stores are happy about grocery delivery, think again. Stores that usually do the most sales will be challenged with this shift in technology. Stores that are geographically suited for lots of deliveries are chosen by an agreement between the delivery company and the store. Instacart and Shipt both have already pre-selected the store you are to shop at so customers who usually shop at one may now be receiving groceries from yet another.
To understand how your earnings are split between you and Instacart, we’ll take a real Aldi’s order from the Marietta Georgia zone. You’ll see the store pricing (what a customer would have paid if they went into the store), Instacart pricing (what Instacart charges for the grocery per item), and the current fees for a customer who doesn’t want to pay an annual fee and chooses to pay per order. We do make some assumptions here:
- You are a 5-star shopper so you get the $3.00 bonus.
- There are 23 items, and 6 items are multiples.
- The customer added a tip in the app and they also added $5.00 when the shopper completed delivery.
|Arugula/Spinach||$ 2.49||$ 2.75||1||package||10%|
|Org Veg Broth||$ 3.58||$ 3.98||2||package||11%|
|Carrots||$ 1.29||$ 1.45||1||bag||12%|
|White Onions||$ 1.99||$ 2.19||1||bag||10%|
|Avocado||$ 2.37||$ 2.67||3||each||13%|
|Jalapeno Peppers||$ 0.99||$ 1.09||2||bag||10%|
|Organic TOVs||$ 3.98||$ 4.38||2||bag||10%|
|Beans (dried in bag)||$ 1.69||$ 1.89||1||bag||12%|
|Chicken Sausage||$ 2.99||$ 3.29||1||package||10%|
|Corn tortilla||$ 1.29||$ 1.45||1||bag||12%|
|Strawberries||$ 2.99||$ 3.29||1||package||10%|
|Vinaigrette Dress||$ 1.89||$ 2.09||1||bottle||11%|
|Whole Bean Coffee||$ 7.58||$ 8.38||2||bag||11%|
|Paprika||$ 0.99||$ 1.09||1||package||10%|
|Organic Thyme||$ 1.99||$ 2.19||1||package||10%|
|Green Onions||$ 0.69||$ 0.79||1||bag||14%|
|Cilantro||$ 0.49||$ 0.55||1||bag||12%|
|Brown Rice Crisps||$ 4.98||$ 5.50||2||bag||10%|
|Cagefree eggs||$ 2.29||$ 2.29||1||package||0%|
|Garlic||$ 0.99||$ 1.09||1||bag||10%|
|Dried Cherries||$ 2.49||$ 2.75||1||bag||10%|
|Cherry tomato||$ 2.89||$ 3.19||1||package||10%|
|Total||$ 52.92||$ 58.34||10%|
|Delivery Fee||$ 3.99|
|Aldi Bag Fee||$ 0.21|
|Service Fee||$ 2.92|
|Tip (in app)||$ 5.83|
|Sales tax||$ 1.18|
|Tip (Cash)||$ 5.00|
|Total Cost||$ 77.47||Insta||Tip||5-Stars|
|Shopper Delivery gross profit||$ 22.63||$ 8.80||$ 10.83||$ 3.00|
|Instacart Profit||$ 1.92|
I won’t argue that this is a typical order; but what I will say is that out of 250+ orders I completed for data analysis, that the number of items averaged 16 and the earnings (without bonus or tips) averaged $10. I did not have the luxury of turning down low estimates back in June (2018); but it is clear by the groanings of Instacart shoppers online that express (thus small orders) are growing. So what does $22.63 for one shop mean to the 5-star shopper? I’ll break it down for you because I also tracked when the order was received by the shopper and when the order was delivered to the customer.
|Order Rec’d by Shopper||3:22:00 PM|
|Order Deliver Start||3:52:00 PM|
|Order Delivered||4:11:00 PM|
You are looking at about one hour of work for $22.63 gross. No, not every shopper can make this every time and unfortunately I found that most customers don’t tip. Once the order is delivered, the driver has to reset, look for another order or head back to the
Assumptions: Self employed pay both employer/employee minimum FICA: 15% tax, vehicle dep is based on a 2008 model car and typical maint/fuel, Health insurance cost is typical but could be much different in a variety of ways, Using a 10% tax rate, Based on 40 hours a week, 8 orders per day.
|With Tips||Without Tips|
|Gross Profit||$ 22.63||$ 11.80|
|Self Employment Tax||$ 3.39||$ 1.77|
|Vehicle Dep/Gas/Supply||$ 1.50||$ 1.50|
|Health Insurance||$ 1.66||$ 1.66|
|10% Tax Rate (Federal)||$ 1.92||$ 1.00|
|Net Profit||$ 15.81||$ 7.53|
|Potential Month Income||$ 2,529.91||$ 1,204.32|