The Case Against Thrive Market

08/1/2016 5:52 PM

I was a big fan of Thrive Market in the early days despite long shipping delays and the occasional mixed up order. I enjoyed significant discounts on items that I bought frequently, such as Bulletproof Coffee and Vital Proteins collagen. Unfortunately, all of my frequently purchased products were removed from the store within the first few months of the membership with the promise that they'd return soon, but never did.

Unlike many other early adopters, I did not take advantage of any free membership coupon code and paid the full $60 / yr fee. I also didn't take advantage of their referral program. My perspective here is entirely based on the average Thrive customer who only pays for the service and expects notable discounts in return.

I've come to the conclusion that Thrive is a bit of a scam. Let me explain.

Thrive is not some scrappy startup -- it has received a total of $149 million dollars in equity funding from 23 investors after three rounds of funding. Investors typically look for a 10x return, putting the valuation of Thrive likely over $1 billion dollars. This is important to keep in mind because they are under tremendous pressure to become the number one online retailer of "healthy" non-perishable food products. This is why Thrive customers are emailed offers almost daily and sometimes multiple times a day. It's also why they've begun producing their own products (coconut oil, ghee, ACV, ect).

Rather than taking the approach of Amazon Prime, which has the clear benefit of free shipping of almost any sized order, Thrive chose to go with the less verifiable benefit of discount pricing. The scam of Thrive market is that the discounts advertised are relative to MSRP, not realistic pricing compared to other online vendors, which have no membership, and in the case of Vitacost, the same free shipping deal after $50.

For example, let's compare the pricing of several items from my last Thrive order:

  1. Primal Kitchen Chipotle Lime Mayo
    Thrive : $7.45
    Vitacost : $7.99
    Advertised discount: 25%
    Actual discount: 7%

  2. Primal Kitchen Green Vinaigrette
    Thrive: $5.65
    Vitacost: $5.99
    Advertised discount: 25%
    Actual discount: 6%

  3. Kettle & Fire Grass Feed Beef Bone Broth
    Thrive: $8.95
    Vitacost: $9.39
    Advertised discount: 47%
    Actual discount: 5%

Put in another way, at an average savings of just 50 cents per item, I'd have to buy 120 items per year just to break even on the $60 a year subscription.

My distaste for Thrive reached its peak this past week when I desperately tried to ensure that my Thrive membership would not auto renew for another year. There is no option anywhere under account settings to cancel a membership or to turn off auto-renewal. There is also no way to remove a stored credit card to ensure an auto-renewal doesn't go through. Because of these lack of options, I assumed that memberships must be renewed manually. That assumption was proven false yesterday when I was charged for another year. I immediately emailed Thrive asking them to cancel the membership and reverse the charge. I received a canned response asking me to consider "special pricing" of $30 for 6 months (obviously there's nothing special about that). I responded that I wasn't interested and then received the same canned response AGAIN from the same customer service rep. It took three emails for them to finally cancel the membership. I swear leaving Comcast was easier.