Learn how to validate your startup idea by pre-selling it, for only $80 (includes a free 1-hour consultancy call).

Amazon Restaurants

Food delivery service
Amazon Cemetery
GENERAL INFORMATION
Category:
Food & Beverage
Started:
2015
BUSINESS FAILURE
Cause:
Competition
Closed:
2018

Description

Amazon Restaurants was an online meal delivery service provided on Amazon’s website and through its Prime app that worked in 20 US cities and London.

Ad

Startup Foundations

You don’t need developers to launch your startup. In this free video series, learn tactical strategies proven to deliver results. Get free access to Startup Foundations →

Cause of Failure

Amazon decided in 2018 to stop all operations of the delivery service in London and the US due to competition from other online delivery companies. The company was entering a market dominated by a couple of established companies, so the competition was very harsh. Amazon did provide free delivery for Prime members and had a selection of 200 restaurants, but that didn’t prove to be a sufficient competitive advantage.

The main delivery service competitors of Restaurants in the UK were Deleviroo, which Amazon backed for half a billion dollars, as well as Uber Eats. On the other side of the Atlantic, it faced US-based delivery services like Eat24, Postmates, and GrubHub. 

The three US Delivery companies Uber, GrubHub, and Doordash combined had a 75% share of the US online delivery market, and the incentive of users to switch to Amazon Restaurants proved not to be high enough.

References

The All-In-One Newsletter for Startup Founders

Every week, I’ll send you Failory’s latest interviews and articles, curated resources for founders, and updates on how I’m growing the site to $10k/mo. Join +9,000 other startup founders!