Meesho is an online resellers platform that allows users to promote products listed on the platform with friends and acquaintances using social media and earn a mark up on every confirmed sales effected by them.
In this post we will try to understand how Meesho makes money.
How does Meesho work?
Meesho markets itself as a platform where users can earn money by sharing products with friends and acquaintances on social media.
The products listed on the platform are sold by third-party sellers who have registered with the platform and Meesho does not own, sell or resell any of the products on its own.
Users can share any of the listed products with friends on social media. When someone shows an interest in buying a product, the user can add a mark-up on the displayed price and quote the same to the customer. This mark-up represents the potential profit of the user.
In case the customer is interested in buying the product, the user can then place an order on the Meesho platform on behalf of the customer.
Meesho takes care of the delivery formalities and ensures that the product is delivered to the customer.
Meesho Revenue Model.
Now that we have seen how Meesho works, let us try and understand how Meesho makes money.
As discussed earlier, Meesho does not own any inventory and acts as a facilitator of sales on behalf of the sellers registered on the platform.
Meesho makes money by charging sellers a commission for every sale that is facilitated through the platform.
Note that the commission is not charged from the individual users but from the registered businesses’ who are ultimately selling the goods through the platform.
Further, Meesho also acts a delivery partner on behalf the registered sellers to help them deliver products to the consumers and makes money from such logistics operations.
Hope you liked our discussion on the revenue model of Meesho – the reselling app. You might also be interested in the revenue model of Udaan.
Keep visiting FinMint for more.
Leave a Reply