Is Selling on Meesho Really Profitable and Commission free? The Complete Analysis
You all are aware of one of the fastest-growing app Meesho, nowadays gaining more attention not only in India but also across the world, everyone wants to know about Meesho and its modus operandi.
What is Meesho?
Meesho is an Indian social innovative e-commerce company, discovered with unique concepts by the two Delhi IIT’ians Vidit Aatrey and Sanjeev Barnwal in Dec 2015, headquartered in Bangalore (India). It is based on the B2C model and a wonderful platform for small retail businesses and individuals to sell their products via social media channels like Whatsapp, Facebook, Instagram, and many more.
Meesho is also a ResellingApp available on both Google Play Store and iOS App Store which provides a wonderful opportunity to college students, housewives, and anyone looking for a part-time job to earn Rs.20,000 to 25,000 on monthly basis, by simply reselling the products available on Meesho through their contact.
On Meesho, you find more than 50 lakh different product styles and 650 plus product categories at the lowest price.
It is claimed by Meesho in its advertisement that selling on Meesho is totally commission-free and profitable. How much truth in this statement of Meesho, we will know in this post:
Profit Calculation for Meesho Supplier:
Meesho Settlement Amount Formula
Settlement Amount = Product Price – 0% Commission fee – GST (18% on Commission fee) – TCS (i.e 1% total taxable value)
Settlement Amount = Deposited to your bank account on 15th day of successful order delivery
Product Price = Price decided by the supplier & share with Meesho
Commission fee = Percentage of the product price, it depends on the category
TCS (Tax Collected at Source) = TCS collected by the Meesho from the supplier at the time of sale
- No Fixed Fees
- No Collection Fees
- Without any Hidden Fees
As Meesho does not take any commission from the supplier, we can sell our products on Meesho with 0% commission and make more profit. Moreover, we don’t have to pay any shipping charges, it is managed by Meesho with their logistics partners who pick the products from your door and ship them directly to the customer. The question is if Meesho doesn’t collect commission from us then how do they make their revenue, actually their commission is hidden in delivery charges. Go to the below profit calculation to know more.
Profit Calculation for Meesho supplier with a detailed analysis:
For an instance, a supplier wants to sell a product on Meesho with the below details
Product Name: XYZ
SKU: xyz_123
Product GST: 5%
Product Costing: Rs. 50
Selling Price: Rs. 157
Selling price must include all the expenses incurred on the product + Profit margin + GST amount
Finally, S.P = 50 + 100 + 5% GST = 150 + 7.5 = 157.5 = Rs. 157
Delivery Charges on Meesho
| Particulars | Local | Regional | National |
| Delivery Charges | 40 | 50 | 68 |
| GST 18% Extra | 7.20 | 9 | 12.24 |
| Delivery Charges Including GST | 47.20 | 59 | 80.24 |
Meesho Payment Settlement Sheet:
| Product SKU | Quantity | Product Price (Incl. GST) | Reseller Price (Incl. GST) | Amount (Incl. GST) | Delivery Charges |
| A | B | C=A-B | D | ||
| xyz_123 | 1 | 157 | 0 | 157 | 50 |
| REVENUE BREAKUP | ||
| Product Taxable Value | Delivery Taxable Value | Commission |
| F | G | H |
| 157 | 50 | 0 |
| MARKETPLACE DEDUCTIONS | ||
| Delivery Charges (Excl. GST) | GST @18% | TCS @1% |
| I | J | K=(F+I))1% |
| 50 | 9 | 2.07 |
SETTLEMENT AMOUNT TO SUPPLIER:
| Selling Price | A | 157 |
| Commission | B | 0 |
| Delivery Charges | C | 50 |
| GST 18% | D | 9 |
| Delivery Charges Inc. GST | E | 59 |
| TCS | F=(A+C)*1% | 2.07 |
| Total Deduction | G=D+F | 11.07 |
| Final Settl. Amount | H=A-G | 145.93 |
So, the Profit amount will be (Rs. 145.93 – GST 7.5 = 138.43)
Disclaimer:
I hope this article clears all your doubts regarding profit calculation and commission fees on Meesho.
Thanking you!!
hi..In the profilt calculation, nit sure why you have not deducted shiping charges from the total value…59 Rs should also be deducted.
secondly the GST return should also be calculated as part of return
Please correct me in case I am wrong here
Dear Abninav
Thanks for your valuable comments!
As shipping charges is additionally added on selling price by Meesho.
We also have not considered it in selling price, that’s why it has not been deducted.
The biggest issue with MEESHO for sellers is high returns and cancellations, and no orders without advertising on the site which brings down the profitability to almost 3 to 5%. So in the end its better to sell on Flipkart and Amazon with commission.