Small Orders for 30-Minute Delivery Struggle to Be Profitable
The rise of ultra-fast delivery services like Amazon Now and Walmart’s quick commerce offerings has enabled consumers to order small, urgent items such as groceries or household essentials in under an hour. However, these tiny orders are proving difficult to deliver profitably due to high last-mile costs relative to the low basket sizes. In India, where this model is more advanced, average basket values hover around $4.17, with delivery fees consuming up to 70% of gross margins. To offset losses from small deliveries, companies are adjusting their strategies by slowing down promised delivery windows and introducing pricing structures that encourage customer subscriptions or higher spending per order. Amazon charges Prime members a lower fee for its on-demand service while non-Prime users face steep surcharges—effectively using the model as an acquisition tool rather than just a fulfillment option. The challenge lies in balancing speed with profitability, especially when delivery delays and refunds can quickly erode already thin margins.
Topics: consumer behavior e-commerce last-mile delivery quick commerce