Posted On: Aug 27, 2025

5 Revenue Models to Monetize Your Grocery Delivery Business

Few years ago, buying groceries meant spending an hour at the store – pushing a cart, waiting in line & carrying heavy bags home. Today? Customers want the same thing done in ten minutes with just a few taps on their phone. That shift has created a billion-dollar opportunity for entrepreneurs building grocery delivery startups.

But here’s the reality most founders don’t talk about: building a grocery delivery app is the easy part. The hard part is figuring out how your app will actually make money. Without the right online grocery delivery business model, even the best-designed platform will struggle to survive.

In this blog, we’ll break down five proven revenue models – from commissions and delivery fees to subscriptions and ads – that top companies like Instacart & BigBasket use. More importantly, you’ll see which ones you can apply to your own grocery delivery service to create predictable, scalable income.

1. Commission-Based Model – Earn a Cut from Each Order

This is the simplest and most popular way to run a grocery delivery business. You partner with grocery stores and supermarkets, list their products in your app & take a small commission on every sale.

Say a customer spends $60 through your platform and you charge 12% commission you keep $7.20. The math is easy & the more orders flow through, the higher your earnings.

Why this works:

• Revenue grows as order volume grows.
• Works with multiple merchants, big or small.
• Easy to explain to partners.

But keep in mind, charging very high commission rates can upset merchants. Most startups find a sweet spot between 5–20% depending on order size and location.

2. Delivery Fee Model – Charge for Convenience

Convenience has value. Customers who don’t want to step outside, carry heavy bags, or spend weekends queuing are often willing to pay a delivery fee.

This model adds a fee to each order, usually based on distance, order value, or delivery slot. Many companies also use “free delivery over $50” to push higher basket sizes.

Why this works:

• Immediate cash from each order.
• Flexible you can charge extra for peak hours or express delivery.
• Customers see it as a fair trade-off for saved time.

Amazon Fresh and other players mix this with subscription perks, offering discounts to loyal members. For a grocery delivery startup, delivery fees are one of the fastest ways to start monetizing from day one.

3. Subscription or Membership Plans – Build Loyalty and Predictability

Instead of charging every time, why not let customers pay upfront for benefits? This is what Instacart+ or Walmart+ do. For $10–$12 a month, customers enjoy free deliveries, priority slots, or special discounts.

For your business, this model means steady recurring revenue. And for customers, it creates a sense of belonging they’re less likely to switch to a competitor once they’ve invested in your membership.

Why this works:

• Predictable revenue each month.
• Higher retention because members want to “get their money’s worth.”
• Allows upselling premium tiers, cashback, or extra perks.

If you’re planning grocery delivery app development, memberships are a great way to build loyalty while keeping your revenue stable.

4. In-App Ads and Promotions – Sell Visibility

Once your online grocery delivery app has enough users, it becomes a powerful advertising space. FMCG brands and retailers are willing to pay to showcase their products right at the top of search results or in banner slots inside the app.

Think of it like a supermarket shelf. Companies pay extra for eye-level visibility and the same logic works digitally.

Why this works:

• Very high margins since ads don’t involve logistics costs.
• Gives brands direct access to your customer base.
• You can personalize promotions using purchase history and behavior.

BigBasket, for instance, uses sponsored listings where brands pay for better placement. For a scaling grocery delivery startup, this can quickly become one of the most profitable revenue streams.

5. Hybrid Model – The Smart Mix

In reality, most successful grocery delivery services don’t rely on a single revenue stream. They combine multiple models to stay profitable and flexible.

A hybrid approach could look like this:

• Commission from every merchant order.
• Delivery fees for smaller carts or longer distances.
• Subscription plans for frequent shoppers.
• In-app ads for brands wanting visibility.

This model is future-proof. If one channel slows down (say, fewer new ads in a tough market), the others still bring steady revenue. It’s also scalable perfect for grocery delivery app development companies aiming to dominate long-term.

Picking the Right Model for Your Stage

Not every model fits every business. Here’s a quick guide:

• If you’re just starting: Go for commissions and delivery fees. They’re quick to set up and bring immediate income.
• If you’re scaling: Add subscriptions. They’ll stabilize your revenue while you build a loyal base.
• If you’re established: A hybrid model ensures you don’t depend on just one revenue stream.

Your choice should balance profitability with customer expectations. Too many fees can drive users away, while too many discounts eat into margins. The trick is finding the right mix for your market.

Final Thoughts

The future of the grocery delivery business isn’t just about speed of delivery or app design. It’s about building a revenue model that makes sense for both you and your customers.

Commission, delivery fees, subscriptions, ads, or hybrids all five models have their place in the industry. The key is knowing when to apply which.

At Grofee, we’ve seen how the right online grocery delivery business model can turn a small idea into a sustainable, profitable company. If you’re working on a grocery delivery startup, think beyond building a feature-rich app. Pair it with a solid revenue strategy & you’ll have a business that lasts.