Arguably the worst business model ever created is grocery delivery in 10 minutes. Known as rapid grocery delivery or RGD, companies such as Gorillas, 1520, Fridge No More, and many others, burst onto the scene in 2020 only to be out of business or on their deathbed by 2023.
The primary reason why RGD companies went out of business is that their model had a one-to-one delivery ratio – one courier makes one delivery. RGD companies also lacked density – making many deliveries to many customers in close proximity of each other.
Finally, RGD companies went out of business because they didn’t charge a delivery fee, and the revenue they generated from each delivery couldn’t cover their actual operating costs.
In order to survive, RGD companies needed to slow down. I wrote about it in the article I posted in the comments.
Buncha is a grocery delivery company that understands the importance of placing the focus on density and creating a one-to-many ratio – one van making many deliveries to many customers.
By convincing customers to agree to a set delivery schedule, Buncha is able to aggregate orders from multiple retailers that have been placed by customers in the same neighborhoods. In turn, delivering many orders in one van allows Buncha to scale the delivery costs across all of the orders hence the $1.45 delivery fee.
CEO Bharat Pulgam has created a model very similar to a company called Picnic Technologies. Buncha also uses a model similar to the milkman model. Scheduling deliveries allows Buncha to control their logistics costs while maximizing revenue. Smart. Very smart.
I like Buncha. However, I encourage the company to expand the model to include consolidating package deliveries from UPS, FedEx, USPS and Amazon. Instead of many trucks making many deliveries of packages to the same customers in the same neighborhoods, packages are consolidated on trucks. This will reduce the total number of trucks needed to deliver the packages. This idea is worth evaluating. If successful, this model will generate the most revenue for Buncha.
Buncha is a startup but they should Think BIG. Bharat should work with his executive team to map out a strategy whereby Buncha’s business model can be utilized across retail vs. only grocery delivery. In addition, Buncha would be wise to explore how to consolidate food delivery orders, and consolidate food delivery orders with online grocery orders. I believe such a model will provide Buncha with more flexibility and increase the speed of delivery while maintaining the $1.45 delivery fee.
I also encourage Buncha to explore mobile retail. Empower consumers to use an app to “hail a store” to come to their home. Buncha vans can be stocked with top-selling products customers want.
Buncha has a solid foundation upon which to grow. Think BIG, Buncha. Think really BIG.
