In the ever-evolving world of e-commerce, Meesho has emerged as a groundbreaking platform that revolutionizes the way people buy and sell products online. This article explores the innovative business model of Meesho and uncovers the various ways in which the company generates revenue.
The Birth of Meesho
Meesho, founded in 2015 by Vidit Aatrey and Sanjeev Barnwal, began as a social commerce platform aimed at empowering individuals, especially women, to start their own online businesses without the need for hefty investments. The company leveraged the power of social media networks to connect suppliers and resellers, creating a win-win situation for both parties.
The Concept of Social Selling
Meesho's primary revenue stream is built on the concept of social selling. The platform provides a marketplace where suppliers can list their products, and resellers can curate and sell these products directly to their network of contacts, primarily through popular social media platforms such as WhatsApp, Facebook, and Instagram. Meesho acts as an intermediary, facilitating the transactions and ensuring a seamless experience for both sellers and buyers.
Supplier Commission
One of the ways Meesho generates revenue is through supplier commissions. When a reseller successfully sells a product listed on the platform, Meesho receives a commission from the supplier. This commission is usually a percentage of the product's selling price, which varies depending on the category and supplier. By connecting suppliers with a vast network of resellers, Meesho enables suppliers to reach a larger customer base and increases their sales volume, ultimately benefiting both parties involved.
Reseller Margins
Another key aspect of Meesho's revenue generation model is the reseller margins. Meesho allows resellers to set their own selling price for the products they curate from the platform. The reseller margin represents the difference between the purchase price (listed by the supplier) and the selling price (set by the reseller). This margin serves as the reseller's profit and contributes to Meesho's revenue through the transaction fees charged to resellers.
Transaction Fees
Meesho also earns revenue through transaction fees imposed on resellers. These fees are applied when a transaction is successfully completed on the platform. The amount of the transaction fee typically depends on the product category and selling price. By charging transaction fees, Meesho ensures a sustainable revenue stream while providing resellers with a comprehensive set of tools and services to support their businesses.
Advertising and Brand Collaborations
In addition to its core revenue streams, Meesho leverages its extensive user base and data insights to offer targeted advertising and brand collaboration opportunities. By analyzing user preferences and behavior, Meesho can deliver highly relevant advertisements and partnerships to resellers and their customer base. This advertising model allows Meesho to generate revenue through sponsored content and partnerships with brands eager to tap into Meesho's vast network of resellers and customers.
Funding and Investments
To fuel its rapid growth and expansion, Meesho has attracted substantial funding from prominent investors. The company has secured investments from venture capital firms such as DST Global, Shunwei Capital, and SAIF Partners, among others. This infusion of capital has enabled Meesho to continuously improve its platform, expand its user base, and explore new avenues for revenue generation.
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Conclusion
Meesho has disrupted the traditional e-commerce landscape with its innovative approach to social selling. By empowering individuals to become entrepreneurs through its platform, Meesho has created a thriving ecosystem where resellers, suppliers, and the company itself can prosper. Through a combination of supplier commissions, reseller margins, transaction fees, advertising, and strategic investments, Meesho has established a sustainable revenue model that fuels its growth and solidifies its position as a leader in the social commerce space.
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In summary, Meesho's success in making money lies in its ability to harness the power of social selling and connect suppliers with resellers, all while providing value-added services and opportunities for brand collaborations. As the e-commerce industry continues to evolve, Meesho remains at the forefront, reshaping the way people buy and sell products online.
