A study in early 2019 by Bain & Company found that grocery delivery in the United States was set to “explode.” If you’re looking to capitalize on this opportunity and break into the gig economy, one way you can do so is by becoming a shopper and delivering orders to people in your area.
There are many grocery store delivery services available, including popular options like Shipt and Instacart. Today, we’re going to break down what it’s like to work for Shipt and what you can earn if you choose to work for this grocery delivery service. By the end of this article, you should have a clear understanding of the potential Shipt shopper pay so you can determine whether this app is right for you.
- What Is Shipt?
- How Does Shipt Work for Shoppers?
- Earning Money With Shipt
- Shipt Shopper Pay Structure
- Frequently Asked Questions
What Is Shipt?
Shipt is a delivery service owned by Target. The company launched in November 2014. Target acquired the company three years later for $550 million. Although Target owns Shipt, Shipt operates as an independent subsidiary. In addition to groceries, Shipt customers have access to deliveries for:
- Baby supplies
- Household cleaning supplies
Alcohol delivery is only available in certain areas. Shipt is not permitted to deliver prescriptions or tobacco products.
As a Shipt shopper, you’ll be responsible for doing the in-store shopping for a customer’s order and delivering it to his or her home. Let’s take a closer look at how Shipt works.
How Does Shipt Work for Shoppers?
Shipt connects to local grocers and convenience stores. Customers can virtually browse the aisles of these stores, ordering everything from fresh produce to household goods. It’s as if the customers themselves are in the grocery store. However, they don’t do the actual shopping — that’s where you come in.
When a customer completes their order, it will be made available to you via a separate Shopper App, available on iPhones and Android smartphones. If you accept the order, you’ll take the grocery list and fulfill it for the customer, browsing the store and securing the requested items.
Customers can follow along for real-time updates. If a product isn’t available, you can let the customer know and ask them if they’d like to buy an alternative product.
Shipt guarantees that deliveries will arrive in as little as one hour.
Earning Money With Shipt
Multiple factors go into determining your Shipt pay rate. However, the company says that experienced shoppers make roughly $22 per hour, based on an average of 30 trips. On average, drivers earn $15-$25 per hour. It’s easy to look at this figure and think that you’re making more than minimum wage and that this is good pay.
However, when you’re a Shipt shopper, you work as an independent contractor, not an employee. Although this provides perks like being able to set your own schedule, it can also significantly impact your rate of pay.
Shipt Shopper Pay Structure
As mentioned, there are several factors that affect the Shipt shopper pay rate. Drivers receive $5 for every trip that they complete, in addition to 7.5% of the total order cost.
So, let’s say that a customer places a $200 order. You’ll keep 7.5% of the order, or $15. Add this to the $5 base pay, and you’ll receive $20 for the order.
Drivers also get to keep 100% of the tips they receive. Unfortunately, tipping on the site can be inconsistent, as one driver revealed to Cooking Light. The company does not explicitly spell out how much customers should tip. One Reddit thread seemed to find a 10% tip acceptable.
So, for the sake of discussion, let’s say you earn a 10% tip on your $200 order. The $20 payment from Shipt plus the $20 tip provides a net pay of $40. Your hourly rate of pay would then depend on how quickly you were able to complete the order for the customer.
However, you’ll need to consider taxes in your net pay. Because you are an independent contractor, you have to pay self-employment taxes. This means that you’ll pay 15.3% for Social Security and Medicare taxes, as opposed to the 7.65% that regular employees pay. You’ll need to make estimated quarterly tax payments to the IRS and your state government to avoid penalties.
You’ll also need to consider expenses like car maintenance. One of the requirements of being a Shipt shopper is to have a valid U.S. driver’s license, a reliable vehicle, and auto insurance.
You can deduct expenses from your gross income when filing taxes, but you’ll also need to pay for services as they come up. For instance, imagine you pay $5 in gas for your $40 order. Your net pay is $35, not factoring in taxes.
Having said this, the only real driving you’ll be doing is going from the grocery store to a customer’s house, and then potentially back to the grocery store to pick up an order for another customer. You shouldn’t put nearly as much wear-and-tear on your vehicle as you would driving for Uber or Lyft.
Frequently Asked Questions
Still wondering about some of the ins and outs of Shipt shopper pay? The answers to these frequently asked questions should help.
1. Do I have to pay for groceries out of pocket?
Once you’re accepted to work for Shipt, the company will provide you with a prepaid card. When you receive and accept an order, Shipt will fund this prepaid card with the approximate amount of the order. Typically, the company provides extra funds on the card in case of unexpected groceries. You should never have to pay for a customer’s grocery order out of your own pocket.
2. How do I receive my pay?
Shipt pays its independent contractors via direct deposit, so you’ll need to have a bank account on file that will allow you to receive your funds. The company sends direct deposits every Friday for the work completed the previous Monday through Sunday.
3. How do I apply to work for Shipt?
To work for Shipt, you’ll first need to apply online. Then, you’ll need to complete an interview with the company and pass a background check. If you’re approved, you’ll be invited to download the Shipt Shopper app, which will allow you to start completing orders.
4. Is Shipt available in my area?
Before you commit to being a Shipt shopper, you should make sure that there are an array of stores in your area using Shipt, thereby maximizing your earnings potential. The Shipt home page has a section that allows you to enter your zip code to see the stores offering delivery in your area.
Start Earning With Shipt
As an independent contractor, Shipt allows you to be your own boss. You can have a flexible schedule, working either part-time or full-time. Overall, Shipt shopper pay is pretty good, but a good portion of the pay is dependent on tips, and you’ll need to be mindful of expenses cutting into your net earnings.
But, if Shipt exists in your area, it’s worth checking out. Shipt could become a reliable side hustle that allows you to earn extra money.