Zomato-owned quick commerce platform, Blinkit, is making a significant change to its commission model as part of its ongoing efforts to improve profitability. Starting March 13, 2025, the company will move away from its existing fixed-rate commission structure and introduce a more flexible, variable pricing model based on the selling price of the items sold. This new approach is expected to help Blinkit enhance its bottom line and better align its commission structure with the market realities.
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Blinkit’s Current Commission Structure
Currently, Blinkit charges sellers and brands on its platform a fixed commission rate that ranges between 3% and 18%, depending on the product category. This model has been effective in the initial stages of the company’s operations, providing a straightforward and predictable revenue stream. However, as the company continues to scale and the market dynamics shift, Blinkit recognizes the need to optimize its revenue generation methods and improve its overall profitability.
The fixed commission rates have worked well in the past but might not allow the company to fully capture the potential of high-margin products or provide enough flexibility to adapt to changing market conditions. This has led Blinkit to reassess its approach, resulting in the shift to a more dynamic commission structure.
The New Variable Pricing Commission Model
Under the new system, Blinkit will charge a commission that varies based on the selling price of individual items. This means that the platform will no longer adhere to a one-size-fits-all pricing model, but instead, will adjust the commission on a case-by-case basis, ensuring that the company’s take rate—i.e., the percentage of revenue it earns from the gross order value—better reflects the value of the product being sold.
The variable pricing model will help Blinkit capture a larger share of high-value sales, which could lead to a significant improvement in its overall take rate. It will also allow the company to stay competitive and responsive to different sellers’ needs, enabling more nuanced pricing that could attract a wider range of products to the platform.
Strategic Move to Improve Profitability
This shift in Blinkit’s commission structure comes at a time when the company is focused on improving its bottom line and optimizing operational efficiencies. Quick commerce platforms like Blinkit face intense competition, as they are expected to offer lightning-fast deliveries while maintaining a low-cost structure. The quick commerce sector is growing rapidly, and Blinkit’s parent company, Zomato, has made it clear that profitability is a key goal moving forward.
By introducing a variable commission structure, Blinkit aims to improve its take rate—an important metric that reflects the percentage of revenue the company earns on gross order value. A higher take rate will allow Blinkit to maximize its earnings without having to increase the prices of products, which could risk alienating customers or losing market share.
This move will also provide the company with more flexibility in negotiating deals with sellers. By adjusting the commission structure based on product categories and selling prices, Blinkit can tailor its offerings to fit the specific needs of its seller base. This flexibility could make Blinkit a more attractive platform for both small and large sellers, as it would allow them to optimize costs and maximize profits.
Impact on Sellers and Consumers
For sellers, this change could have a mixed impact. On the one hand, the variable pricing model could lead to higher commissions on high-ticket items, which could result in increased costs for those sellers. However, for low-margin or low-priced items, the flexible commission could lead to more favorable terms. Sellers will likely need to adjust their pricing strategies to account for this new commission structure.
For consumers, the impact might be less direct. While the revised commission model could affect pricing on the platform, it is unlikely to result in immediate price increases. Blinkit has positioned itself as a quick commerce platform focused on affordability and convenience, and maintaining competitive pricing will remain a priority.
Conclusion
Blinkit’s shift to a variable pricing commission model reflects the company’s commitment to improving its profitability while adapting to the evolving market dynamics of the quick commerce sector. By aligning its commission structure with the selling price of items, the company is positioning itself to better capture high-margin sales and optimize its revenue generation. As the industry grows and competition intensifies, Blinkit’s ability to remain flexible and responsive to market needs will be a key driver of its long-term success.
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