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Business Operations Business Models

How Does Gopuff Make Money (Business and Revenue Model)

The Gopuff business model

How Does Gopuff Make Money?
Here’s what you should know:
  • What is Gopuff, and how does Gopuff work?
  • How does Gopuff make money?
  • FAM Subscripion
  • Delivery Fees
  • Advertising (Gopuff Ads)
  • Gopuff’s Subsidiaries, Acquisitions, and Exits
  • Gopuff’s profit and revenue
  • What is the Gopuff business and revenue model?
  • Gopuff’s funding and valuation

How does Gopuff make money if it’s so cheap? Here is a full, in-depth, breakdown of their three (3) revenue streams and the different products and services they offer, as well as the Gopuff business model, their year-over-year revenue, and how Gopuff works.

What is Gopuff, and how does Gopuff work?

Gopuff is a 24/7 consumer goods food delivery service.

Founded in 2013 by Yakir Gola and Rafael Ilishayev, Gopuff now has over 500 micro-fulfillment centers and is operating in more than 1,000 cities across the US, according to Gopuff’s about page.

How Gopuff works is: Users can place an order by downloading the app or place it directly through their website. Once signed up, customers will have access to thousands of products ready for delivery within minutes, 24/7.

Gopuff stores roughly 3,000+ products in each of their micro-fulfillment centers, so when customers order, their stuff gets picked up directly from Gopuff’s fulfillment centers and delivered straight to the customer. This is why Gopuff says they can deliver within minutes.

Some of Gopuff’s competitors include DoorDash, Postmates, Uber Eats, Grubhub, Instacart, and other food delivery services.

Gopuff App in Apple App Store | Gopuff Business Model | How Does Gopuff Make Money?
Source: Apple App Store | Gopuff

How does Gopuff make money?

Below is a breakdown of how much money Gopuff makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 3 ways of how Gopuff makes money (in 2021):

Gopuff has a revenue model that makes money in three (3) ways – subscriptions, delivery fees, and advertising.

#1. FAM Subscripion

One of the ways Gopuff makes money is by offering a subscription service to its Gopuff customers called FAM.

For the price of $5.95 per month, the subscription service offers perks like unlimited free deliveries, 2X Puff Points on every order, and waived alcohol fees.

Gopuff FAM Cost:

  • $5.95 per month
Gopuff FAM Subscripion | Gopuff Business Model | How Does Gopuff Make Money?
Source: Gopuff

Note: Gopuff has not released any official numbers on how many paying customers use this service and or the percentage of their revenue that this accounts for.

#2. Delivery Fees

In addition to subscription revenue, Gopuff also makes money through delivery fees.

For customers who do not have a Gopuff FAM subscription, a $1.95 delivery fee will be applied to every order. As well as an additional $2 if the deliveries include alcohol.

Gopuff Delivery Fee:

  • $1.95 delivery fee
  • Additional $2 for deliveries that include alcohol

#3. Advertising (Gopuff Ads)

Another way Gopuff makes money is through its advertising. It’s what the company calls Gopuff Ads.

Since its launch in June 2021, brands like PepsiCo, Mars Wrigley, Kraft Heinz, and Unilever are some of the companies that now advertise on Gopuff Ads according to Gopuff’s blog.

Gopuff Ads work off of a Cost-Per-Click advertising model. Meaning, advertisers only get charged when the advertisement is clicked on. The average Cost-Per-Click on the platform is unknown.

Gopuff Ads | Gopuff Business Model | How Does Gopuff Make Money?
Source: Gopuff

Gopuff’s Subsidiaries, Acquisitions, and Exits

To date, GoBrands, Inc. (Gopuff) has made a total of 6 acquisitions.

Acquisitions
Source: Crunchbase

Gopuff’s profit and revenue

In 2020, Gopuff is estimated to have brought in around $1 billion in revenue.

Note: Because GoBrands, Inc. (Gopuff) is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the Gopuff business and revenue model?

Gopuff makes money through a few revenue models that they combine within their company, they are:

  • Subscription based business model
  • Fee-for-service (FFS) business model
  • Advertising business model
  • B2B2C (partnerships) business model
  • Mergers & acquisitions (M&A) business model

Gopuff’s funding and valuation

According to Gopuff’s Crunchbase profile, Gopuff has raised $3.4 billion over 8 rounds and has a valuation of $15 billion as of July 2021.