How Does Instacart Work: Revenue Model & Key Features

Last Updated On 22 August, 2025

Technology drives innovation. It brings fresh solutions to many problems, such as grocery delivery. With the advent of online grocery delivery platforms, consumers are getting more inclined towards buying groceries online. They choose to buy groceries online because of the convenience, flexibility, and cost-effectiveness it offers. This thriving industry is supported by 1.4 billion monthly consumers.

Moreover, the online grocery delivery industry is expected to reach USD 623.70 billion by 2034, growing at a CAGR of 26.83% from 2025 to 2034. The online grocery delivery industry seems promising currently. However, Apoorva Mehta, Co-founder of Instacart, harnessed the power of technology and created Instacart 10 years before the culture of online grocery delivery became a norm.

Considering the success & popularity of Instacart, launching a platform similar to Instacart can prove to be a lucrative venture. In this blog, we share all about Instacart, a supermarket delivery and pickup service based in Canada and the USA, and how you can launch your own grocery delivery service like Instacart.

The Journey – Instacart

Instacart was founded in 2012 by three entrepreneurial friends – Max Mullen, Apoorva Mehta, and Brandon Leonardo. Primarily, Apoorva had developed the concept. During his time as an employee of Amazon, Mehta saw how the delivery of products affected the status of the company. Furthermore, speed, convenience, and accuracy weren’t just important to customers; they were the driving force behind its success. Other aspects included quality and product variety.

Mehta began creating the platform ‘Instacart’ as a remedy to a personal aversion to grocery shopping. It is reported that Mehta placed an order on an early version of the Instacart app. He walked to the grocery store and self-delivered the order. Going forward, the operations of Instacart began in San Francisco, and by 2015, the company had around 200 employees. The services of Instacart grew by word of mouth. To fulfill the demand, Apoorva had to train and employ shoppers.

Over the years, Instacart grew to become an online grocery delivery behemoth and plans to expand into other verticals in the future. Recently, Instacart generated $3.38 billion in revenue and reported a net income of $457 million for 2024. With 14.4 million daily active users, Instacart has experienced tremendous growth since its inception.

3-Tiered Customer Strategy of Instacart

Now that we know the history of Instacart, let us look at its customer strategy. Instacart works on a 3-tier customer strategy, which is based on the fusion of Uber and Airbnb operating models. In other words, the 3-tier customer strategy of Instacart involves the following 3 players:

• Retail Partners
• Instacart Shoppers
• Consumers

Retail Partners

• Grocery retail partners are vendors who have entered into a contract with Instacart to list their stores and products on the platform. This helps them to increase their profit via online sales through the platform. Also, retail partners are listed under their names. 
• Vendors list their products on the platform and enable customers to order grocery products from the comfort of their homes at their convenience. 

Instacart Shoppers

Shoppers get paid for shopping. They normally visit the grocery store and earn extra money by shopping for others.

• Instacart offers two different shopper roles, and each has different requirements and benefits. These are: 
• Full-Service Shoppers
  Independent contractors who use the platform to shop and deliver orders to buyers are known as full-service shoppers.
• In-Store Shoppers
  In-store shoppers are those who, among other things, prepare orders in a store at a time. They do not make doorstep deliveries.

Instacart shoppers create an account at shoppers.instacart.com, download the shopper app from the Apple App Store or the Google Play Store to complete the signup process. Once the user is approved to shop, they can start making money as per their schedule.

Consumers

• These are the end users who use Instacart to purchase groceries. 
• Consumers buy multiple types of products from across the digital storefront. Much like going in person to the grocery store, consumers spend time browsing digital aisles and adding items to their carts. 
• Moreover, Instacart’s same-day delivery service brings fresh groceries to the doors of consumers in the U.S. and Canada, and that too within 1 hour.

How Does Instacart Work?

For Consumers

• End-users/consumers sign up.
• Consumers browse and add items to their shopping carts.
• They add the address and other information; make a payment, and select the date and time of delivery.
• The shoppers are notified, and once the items are purchased, the shoppers deliver them to the consumers.

Consumers can also opt for self-pickups directly from the store by selecting a pickup time at their convenience.

For Shoppers

Here, we discuss the working of both full-service and in-store shoppers.

• Both full-time and in-store shoppers register and create a profile on the platform.
• Both shoppers receive orders via notifications on their smartphones.
• The shoppers pick the order items manually and pack them.
• Full-time shoppers deliver the orders to the consumers, while in-store shoppers do not deliver. They are in-store employees and make sure that the orders are ready for pick-up.

For Retail Owners

• Grocery retail owners list their items and sell them through the platform.
• They also promote and advertise their business frequently on the platform.

How Does Instacart Make Money?

Instacart doesn’t charge the stores any commission on the orders placed through its platform. However, it has other revenue streams. These include:

Mark Up Prices

Some stores sell their products at the same price as their in-store prices. But a few stores have a mark up of 15% or more on their products. The revenue earned from this mark up goes to Instacart and helps pay its shoppers.

Delivery Fee

Instacart delivers orders with a value of at least $10. However, for same-day delivery, it charges $3.99 on orders above $35. It is important to note that Instacart+ members get free delivery on orders above $35 or more, per retailer.

Membership Fee

Formerly known as Instacart Express, Instacart+ is a membership program that saves time and money. The program offers unlimited free delivery on grocery orders of or above $35. The service fee charged is also lower. There is a 14-day free trial and after that $99/yr is charged.

Service Fee

To cover a range of operating costs, Instacart charges a service fee. This includes insurance, background checks, shopper operations, and customer support. Here, it is important to note that pickup orders have no service fees.

Pickup Fee

Just like a delivery fee, orders from certain retailers have a “pickup fee.”

Partner Payments

Instacart earns money by charging fees from its partners. A few businesses like Kroger, Costco, and many others have partnered with Instacart to integrate their services. The revenue is generated through commissions per order (if stated in the contract) for every partner platform.

Features to Incorporate while Creating a Platform like Instacart

As demand for online grocery continues to grow, the features that grocery retailers can implement à la carte, are the stepping stones to the success of the online grocery delivery business. In this section, we mention the features to have in a platform like Instacart.

Consumers	Delivery Partners	Vendors	Admin
Easy sign-up & registration Search & Filter Ratings & Reviews Order Tracking Discounts and Coupons Multiple Payment Options Push Notifications	Dashboard Route Optimization Accepting or Rejecting an Order Chat/Call with the Consumer Define Radius Notifications & Alerts	Vendor Dashboard Product Catalog Management Shop Management Order Tracking Reports Inventory Management	Commission Management Reports and Analytics Order Management Multiple Revenue Streams Content Management Referral, Promotions, & Loyalty Programs Delivery Management

 

Consumers

Important features for customers:

• Easy sign-up & registration: It is extremely crucial to let users seamlessly sign up and register on the platform. 
• Search & Filter: This feature enables customers to search for & find the grocery products as per their needs. 
• Ratings & Reviews: This feature is extremely important for building the credibility of your business in the market. Allow customers to rate their shopping experience on the platform.  
• Order Tracking: Customers can track their orders efficiently and get related updates in real-time. 
• Discounts and Coupons: Provide discounts and coupons to users to promote your grocery delivery platform to your targeted audience. 
• Multiple Payment Options: It provides convenience & flexibility to users while making payment. Offer different payment options to users, such as credit/debit cards, eWallet, net-banking, and more   
• Push Notifications: Share real-time updates and important messages with users, providing push notifications & instant alerts. 

Delivery Partners

Must-have feature for delivery partners:

• Dashboard: A powerful dashboard helps delivery partners in managing the orders, assignments, and other operations involved, seamlessly, all in one place.
• Route Optimization: This is a crucial feature that enables delivery partners to complete order deliveries on time. By leveraging these features, delivery staff can optimize the delivery routes, reducing turnaround time and improving their overall efficiency
• Accepting or Rejecting an Order: Enable delivery partners to accept or reject the orders as per their availability and convenience.
• Chat/Call with the Consumer: This feature facilitates direct contact among delivery partners and customers, enabling a smooth grocery delivery experience.
• Define Radius: This functionality enables delivery partners to define the radius within which they want to do deliveries. It gives them scope to perform their best and utilize their complete abilities.
• Notifications & Alerts: Instant alerts & notifications keep the delivery staff informed about new orders and other important information & updates. This feature is essential for smooth communication on the online grocery platform.

Vendors

Important features for vendors:

• Vendor Dashboard: A robust vendor dashboard enables vendors to have an overview of ongoing pickup and delivery operations. Vendors can access important insights such as sales reports, order processing, tracking, payments, and more. A dashboard keeps the information more organized and streamlines the management process.
• Product Catalog Management: A product catalog management system can boost massive productivity by enabling the seller to upload, manage, and handle a large catalog of products seamlessly.
• Shop Management: This feature enables the vendors to efficiently register & sign up on the platform, and allows them to manage the shop, list products, update the information, and edit the product descriptions.
• Order Tracking: Order tracking features are extremely important to let vendors have an overview of every stage of the delivery process. Vendors can monitor orders in real-time, eventually improving operational efficiency, optimizing routes, and ensuring timely order fulfillment.
• Reports: Reports are essential for gaining insights into important analytics such as sales, product inventory, stock status, top-performing products, top categories of grocery items, and more. These reports assist vendors in gaining an understanding of the orders.
• Inventory Management: Dynamic inventory management features are essential to ensure a seamless shopping experience. By leveraging inventory management features, vendors can effortlessly add or remove items from the store’s inventory and keep product availability updated.

Admin

Admin is solely responsible for managing the online grocery delivery platform and handles users and other important business operations. Here are important admin features:

• Commission Management: This is an extremely crucial feature for the admin, as it enables them to define the commission rates, share dedicated revenue with sellers and delivery drivers, and seamlessly handle all the financial transactions.
• Reports and Analytics: Reports and analytics are essential for data-driven decision making. This functionality enables the admin to gain important insights related to sales, website traffic, top searched items, top selling products, and more.
• Order Management: The admin can efficiently oversee the orders at a glance. With robust order management features, the admin can track orders, deliveries, and ensure faster fulfillment of orders at customers’ doorsteps.
• Multiple Revenue Streams: To earn high profits and establish a sustainable revenue model, the admin must incorporate diverse revenue streams. Multiple revenue streams, including subscription, commissions, affiliate partnerships, advertisements, sponsored listings, and more, help increase revenue and diversify revenue-earning opportunities.
• Content Management: By leveraging content management features, the admin can seamlessly handle the content marketing aspect of an online grocery delivery business. Blog publishing, social media management, content pages, blocks, language labels, and more can be easily implemented by the admins.
• Referral, Promotions, & Loyalty Programs: To improve the growth of the platform and enhance user retention, the admin must be equipped with features for promotions, referrals, and loyalty programs for customers, sellers, and driver partners. Built-in features for promotion make it seamless for admins.
• Delivery Management: Delivery management features make it easy for admins to either self-manage the deliveries or grant permission to vendors to manage the orders. While handling deliveries, the admin can either manually assign or broadcast the orders to the delivery staff.

At this stage, you are well aware of Instacart, its growth journey, how it works, and earns money. Plus, you have also gained insights into important features for an online grocery delivery platform. Once you have understood this information, it is easier to answer the question: how to create an app like Instacart. Further, let’s discuss the different development approaches to develop your app like Instacart.

Development Approaches to Make an App like Instacart

The success of Instacart must excite many aspiring entrepreneurs to build their own similar grocery delivery platform. However, the process of building an app like Instacart requires good understanding of development approaches; therefore, in this section, let us help you build a successful Instacart-like app without any hassle.  

There are primarily two development approaches – Custom development and Readymade software. Let’s gain more insights.

• Custom Development 

This development approach requires the business owners to hire or outsource a team of qualified web developers and designers. The platform is developed as per the unique requirements of the business and offers complete control. However, the financial investment needed is high, and the development time can also vary from a few months to even a year.

• Readymade Software 

Another development approach is to opt for a readymade software. These software solutions come pre-built with all essential features and capabilities to create and run a grocery delivery platform. With a readymade grocery delivery software, you can build and launch an app like Instacart within a few weeks. Moreover, as compared to custom development, readymade software solutions are more cost-efficient.

Choose the development approach that best suits your business goals, vision, budget, and more. Plus, selecting the right development approach that suits your business requirements can save a lot of your time, financial resources, and costly missteps.

Cost to Build a Platform Like Instacart

The cost of building a grocery delivery platform like Instacart depends on the complexity of the platform and the availability of resources. Depending upon the development approach, feature requirements, and other factors, the cost of development can vary. For instance, the cost of custom development may vary depending on the development charges across different regions.

Listed below are region-wise development charges to build a grocery delivery application.

Country-Wise Development Charges
Country	Development Charges
USA	$70 to $150 per hour
Europe	$30 to $100 per hour
Asia	$10 to $40 per hour

 

Building a platform like Instacart through custom development can cost you approximately $50,000 or higher, considering the average development cost of $30 per hour. Hence, when estimating the cost of development, consider the complexity of the platform (in terms of features) and the location of the development team.

However, readymade software solutions like Growcer start at $499, which is more efficient and cost-effective than custom development. 

Final Words

The transition of consumer behavior to online grocery platforms like Instacart has opened a plethora of opportunities for entrepreneurs to venture into. So, if Instacart inspires you to launch your grocery eCommerce marketplace, this is the right time.

However, building a marketplace like Instacart from scratch can be expensive, as already mentioned above. So, opting for a ready-made solution is a better choice. It is built in alliance with the industry’s best practices, and its features and functionalities are validated and tested over time, allowing you to quickly launch your platform.

FAQs

Q 1. What are the essential features to include when making a grocery delivery app like Instacart?

Ans. Important features for a grocery delivery app like Instacart include: 

• Notifications and alerts
• Registrations & login
• Reports & analytics 
• Order tracking 
• User management
• Advanced searching and filtering
• Ratings & reviews
• Route optimization

Q 2. Can I launch an Instacart-like app without extensive coding knowledge?

Ans. Indeed, with a ready-made software solution like Growcer, you can easily launch an Instacart-like app without any knowledge of coding. Growcer experts help business owners throughout their entrepreneurial journey and manage all the aspects starting from setting up to launching the platform in the market.    

Q 3. What are the key differences between a SaaS-based and a self-hosted solution for a grocery delivery app?

Ans. Here are the key differences between a SaaS-based and a self-hosted software solution.

Aspects	SaaS Software	Self-Hosted
Deployment	Hosted and maintained by the provider	Installed on the server of your choice, providing complete control.
Cost	Monthly or yearly recurring charges	One-time payment
Scalability	Easily scalable, however, the cost can increase with the increasing number of users on the platform.	Can accommodate endless number of users without compromising performance or affecting cost.
Security	As the data is hosted on a SaaS software provider’s server, the security may be compromised.	Highly secure with compliance to data protection regulations such as GDPR.
Customization	Limited customizations	Fully customizable
Control	Less control over data and system settings	Complete control over data and system settings

 

Q 5. How much time does it take to launch an Instacart-like app with a self-hosted, ready-made software solutions?

Ans. Although the time to launch an Instacart-like app can vary depending on the feature integration requirements, customizations, and more, however, a basic ready-to-market grocery delivery app can easily be launched within 2-3 weeks with a self-hosted ready-made software solution. 

Q 6. Which is the best Instacart clone script available?

Ans. Growcer is undoubtedly the best Instacart clone script available in the market. This software solution is not just a basic clone script but a complete ecosystem to create and launch your grocery delivery app.