how-does-gorillas-make-money

How Does Gorillas Make Money? The Gorillas Business Model In A Nutshell

Gorillas is a German online grocery delivery company.  It was founded in 2020 by Kağan Sümer and Jörg Kattner to target an underserved section of the grocery market. Gorillas has two primary revenue generation strategies: product sales, and delivery fees.

Histry of Gorillas

Gorillas is a German online grocery delivery company. 

It was founded in 2020 by Kağan Sümer and Jörg Kattner to target an underserved section of the grocery market.

Sümer identified that consumers organized their grocery shopping around the supply chain needs of the supermarket, rather than the supermarket being organized around the purchasing needs of the consumer.

The result is that most consumers tend to make a weekly, bulk purchase of groceries. This tendency has resulted in an emphasis on long-life shelf products where even fresh food is made to last as long as possible.

Shopping habits based on supply chain needs are also detrimental to consumers who prefer to make smaller but more frequent purchases. Furthermore, the model is inconvenient for those who forget to purchase one or two items from a recipe. 

To solve this problem, Sümer and Kattner asked themselves how a consumer might react to a company serving them with what they needed, when they needed it.

Ultimately, they hypothesized consumers would shift from purchasing groceries weekly to purchasing them as required.

With a small amount of seed funding, Sümer bought some groceries from a local supermarket and stored them in his flat.

When an order was received, he made deliveries on his bicycle in the local neighborhood to ensure customers did not have to wait.

Buoyed by initial success, the service was expanded to a district in Berlin housing 165,000 people. Rapid delivery times and late opening hours then increased word-of-mouth advertising.

The service is now available in every major German city and is beginning to expand into other areas of Europe. In March 2021, Gorillas became the fastest German start-up to reach unicorn status, with a valuation of over $1 billion.

Gorillas revenue generation

Gorillas has two primary revenue generation strategies.

Let’s take a look at both below.

Product sales

Gorillas is an operator of so-called dark stores, or retail and distribution centers catering exclusively for online eCommerce.

As a result, the company makes money when it sells an item for more than the cost of purchasing and then storing it.

Profits are also increased by the dark store model since Gorillas can better track when inventory is running low.

This helps them avoid unfulfilled orders and increases customer satisfaction.

Delivery times are also much shorter as warehouse staff are better able to coordinate with courier staff to process orders quickly.

Delivery fees

For the small fee of €1.80, the company claims it can deliver an order in just 10 minutes.

Delivery fees are so low because Gorillas controls most aspects of the grocery supply chain. 

It should also be noted that these fees cover costs associated with delivery and do not make the company a profit.

Key takeaways:

  • Gorillas is a German online grocery delivery platform. It was founded by Kağan Sümer and Jörg Kattner in 2020 to give consumers fast and convenient access to on-demand grocery items.
  • Gorillas operate a network of dark stores, making money by purchasing grocery items and selling them for a profit. Revenue generation is maximized by efficient inventory management and coordination between distribution and courier staff.
  • Gorillas also charge a small delivery fee to deliver orders anywhere in around 10 minutes. The company does not make money on this fee per se, instead relying on the dark store model as the primary source of profits.

Read Also: How Amazon Makes Money, Instacart Business Model, Last-Mile Delivery, Delivery Apps And Their Business Models, How Does Uber Eats Make Money, How Does Grubhub Make Money, How Does DoorDash Make Money.

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