Though the drumbeats have been pretty persistently beating out a dirge about the high-speed come apart that is effecting/is expected to continue to effect the wonderful world of on-demand delivery businesses, it seems that perhaps Postmates has found itself swept a bit unfairly into a negative storyline.
Recently leaked documents out of the delivery startup indicate that the ship may be sailing along a bit more smoothly than previous reports might have implied.
Those documents ended up in the hands of the team over at TechCrunch – and demonstrated that Postmates’ gross profit margins are clocking in above 20 percent.
That’s not exactly a total score and they may not be profitable, as that figure does not account for operating costs, but it does mean that minimally Postmates isn’t losing money every time it pays a courier to go out there. The documents also seem to indicate that Postmates remains on track to be net profitable by 2017.
Postmates does not mark up its goods other than the delivery charge, but it does charge over 3,200 merchant partners 15 percent to 30 percent commission to be highlighted on the app. The business also takes in some funds from Apple and Starbucks, who use the Postmates API to make ordering part of their platforms. Postmates workers are 1099 employees, so it pays per delivery, though if regulation were to forcibly change their worker base into W-2 employees the firm would reportedly have to shift its business model.
The files reveal that in the first quarter of last year, Postmates projected $55 million in net revenue and $11.3 million in gross profit for last year, a substantial increase from the $8.6 million in net revenue and $1.03 million in gross profit from 2014.
All in, Postmates processed $28 million in transactions, creating $6.5 million in net revenue and $1.1 million in gross profit during Q1, a 67 percent increase from the previous quarter. TechCrunch also reports that the actual results may have beaten forecasts and that Postmates facilitated $56 million in gross merchandise volume in just the third quarter of last year. About $14 million of this was net revenue and gross margins were about 22 percent.
What remains to be seen is if the new release and reporting will sway VCs going sour on on-demand — and who worry that Postmates faces a deep sea of competitors and a lot of examples of businesses that could not make it work.
Postmates, as of yet, has offered no comments on the TechCrunch story.