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USPS: Grocery Delivery Service Won’t Impact Small Biz

Small businesses that deliver groceries have nothing to fear from the Postal Service, it told the Postal Regulatory Commission (PRC) in a filing on Wednesday. The USPS began workingwith Amazon Fresh on grocery delivery last year.

The PRC requested the USPS provide it with answers to three questions regarding its “market test of experimental product for customized delivery.”

First, the PRC wanted some examples of businesses that offered similar products or services in the New York City metropolitan area where the test is being conducted. The USPS listed Fresh Direct, Amazon Fresh, Instacart, and Peapod as some of those services. “The market for grocery delivery is emerging rapidly, with several companies already established in the market, and others looking to enter the market in the near future.”

The PRC also asked for the range of prices charged for similar products and services. “These firms offer several different prices, often depending on order value. Delivery fees can range from $3.99-$15.99,” the USPS said. “Some companies have additional fuel surcharges, minimum order requirements, or membership/subscription requirements.” Specifically it provided the following information:

  • Fresh Direct delivery charges range from $5.99-$7.99 with a $30 minimum order.
  • Amazon Fresh offers free delivery to Amazon Prime members. Free shipping for orders over $50.
  • Instacart delivery charges range from $3.99-$9.99, or free with a membership of $99 annually.
  • Peapod requires a $60 minimum order with delivery fees ranging from $6.95- $9.95. A fuel surcharge is added when gas prices exceed a certain threshold.

When asked for a description of the impact of the expansion on small business concerns, here’s how the US Postal Service replied:

“The Postal Service did not perform market research to this level of detail, but expects the prices offered by small businesses in this market are comparable to the price range offered by the Postal Service through this market test and by larger grocery delivery firms. These courier services already compete with existing retail grocery stores and larger firms, so the Postal Service does not expect its entry into this emerging market will have a significant impact on these smaller firms.”

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.