Key Takeaways
- A new delivery service called No Tip brings Costco food court favorites to customers at steep markups.
- For example, Costco’s $1.50 hot dog and soft drink combo costs $18 with No Tip — a 1,100% markup.
- No Tip founder Jack Chen primarily pitches the service as catering for offices, parties and family gatherings.
Costco sells its hot dog and drink combo for $1.50. A delivery app is betting that getting it delivered and brought to your door is worth a much bigger bill.
According to a recent report from media site SFGate, there’s a new food delivery service in town that promises to bring Costco food court items straight to customers. The platform, called No Tip, is a new service based in Southern California. The mastermind behind it is Jack Chen, a longtime software engineer.
The process is simple. Customers order what they want from Costco’s food court menu through No Tip. Someone will physically go to Costco, wait in line, pick up the food and deliver it. Chen promises to refund customers if their food arrives late — and says the fees are all-inclusive, so no need to pay a tip or added fees.
However, customers are certainly paying extra for convenience.
A whole pizza that costs members $9.95 at the food court runs $30 through No Tip, while the $7.99 rotisserie chicken chef salad jumps to $28 on Chen’s menu. But the biggest sticker shock belongs to Costco’s famous $1.50 hot dog-and-drink combo: No Tip charges $18 to bring it to your door. That’s a 1,100% markup.
Chen stands by the pricing
Chen defended No Tip’s prices. He told SFGate that he built the site to feed a crowd, not just someone craving a hot dog for lunch — though he will take that order too.
Chen says No Tip’s sweet spot is office lunches, birthday parties and big family dinners. The service is suited for situations where paying for delivery means avoiding a trip across town with a trunk full of pizzas.
“A lot of offices are ordering from me,” Chen said in a phone interview with SFGate. “It’s the company’s money. As long as you’re not too expensive, I mean, they’ve got the money to blow.”
The company also benefits when customers crave Costco food court items over other brands. “You’d be surprised how some people are just craving it specifically,” Chen said.
No Tip is capable of accommodating groups of up to 200 people and includes plates and forks with delivery. It is up to the host to set up and serve the food. A company ordering 200 hot dogs would have to pay $18 for each one.
Chen is personally handling some deliveries and has brought on friends and “some guys” he pays “on the side right now” to help with orders. He wants to eventually add in-house drivers.
How Chen came up with the idea
Chen created No Tip two months ago and claims that the service stretches across all of Southern California through 66 fulfillment locations.
He had the idea when he was living near Venice Beach and wanted Costco pizza for dinner one night. Getting that pizza meant making the trip to Costco and braving food court lines. Chen then had the idea to eliminate the hassle of getting Costco food court items by offering delivery. He bet that other Costco fans would also pay extra to have their favorites delivered.
“I know my friends have paid, like, $30-plus dollars for some terrible Domino’s in the past,” he said. “So why not try to do this?”
Key Takeaways
- A new delivery service called No Tip brings Costco food court favorites to customers at steep markups.
- For example, Costco’s $1.50 hot dog and soft drink combo costs $18 with No Tip — a 1,100% markup.
- No Tip founder Jack Chen primarily pitches the service as catering for offices, parties and family gatherings.
Costco sells its hot dog and drink combo for $1.50. A delivery app is betting that getting it delivered and brought to your door is worth a much bigger bill.
According to a recent report from media site SFGate, there’s a new food delivery service in town that promises to bring Costco food court items straight to customers. The platform, called No Tip, is a new service based in Southern California. The mastermind behind it is Jack Chen, a longtime software engineer.
The process is simple. Customers order what they want from Costco’s food court menu through No Tip. Someone will physically go to Costco, wait in line, pick up the food and deliver it. Chen promises to refund customers if their food arrives late — and says the fees are all-inclusive, so no need to pay a tip or added fees.