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Pricing The Product/Service


To decide the prices for our business’s service, I looked at some of the popular nation-wide delivery services and their pricing. For example Amazon charges its members $15/month on top of a $8.25-$10.25/month Prime subscription, which eventually is a $23-$25 for their grocery delivery service. Assuming an average consumer spends 3-4 grocery trips every month, that’d be between $6.25-$8 per trip.  

Vons is also another grocery delivery service, whose parent company is Safeway, offers same-day delivery. For purchases of $150 or more, Vons charges $9.95 for their delivery service. For purchases less than $150, the price goes up to $12.95. This company’s service pricing is obviously much higher than Amazon and what our business anticipated. However, it also proves that there are business models out there that can still profit off much higher pricing in exchange for the convenience that they offer.

For being a local business with the advantage of time and place convenience (which nationwide companies cannot fully provide), I think we can match our prices to about the same as online grocery delivery services. As starter, I think we can charge between 7.5%-10% of the total shopping cost, with a minimum of $6.99 up to a maximum of $14.99 per trip. As the business expands with a larger customer base, we could charge the service by monthly subscriptions of $25 for up to 4 trips. I think the pricing is a little bit modest at the moment but matching our prices relatively to currently available similar services out there with the advantage of time and location convenience, it’d make a convincing consumer friendly appeal. On top of that, we’d like to give customers the options to choose which local stores they’d like their purchases to come from instead of the ones only available with their delivery company.






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