1. Free delivery at your doorstep

2. They get roughly 10% of the total sale (That is for every sale of Rs.2000 they receive only Rs.200 out of which Rs.30 is taken by the payment system organiser, some amount by the courier company,)

3. They provide additional discounts from their own income in festivities, marketing and advertising

They have to bear the cost of the salaries of employees and plus they need to run their own houses right?

These companies also earn through the following :

  • Deals wherein they are solely responsible for the sale of a product in a country. (Like One Plus on Amazon)
  • Launching their own products such as Amazon launching Amazon Kindle along with with other products such as books, dvds, etc!
  • This might sound a bit controversial but also through selling of data of its users. 
  1. They charge commission (in percentage) upon the transaction. That commission is deducted from the transaction value before paying it to seller. Eg, they charge around 2% to 5% on low margin branded categories such as TV, mobile. And 10% to 25% on high margin items like mobile accessories, cloths.
  2. Many offer their own shipping services like Ekart for flipkart and ATS for amazon etc. They charge fees based upon the weights and item price. That fee is again deducted from the transaction amount before giving it to seller Eg, most of them charge around 50rs for anything less that half a kg.
  3. Then there are other fees such as shop fees on eBay or similar fee on amazon which could be around 500 per month.
  4. Some marketplaces such as Amazon, Flipkart, snapdeal etc offer warehousing and order handling. They charge according to the volume of space the seller's goods needing.
  5. Then there are penalties or late fees etc. If any seller misses shipping deadline or something similar to that these charges (many of them) imposed on the seller.
  6. Some like ebay, snapdeal charge fees for using their payment gateways like paisapay etc. it could be a flat fee or in percentage. eg ebay generally eats away 4.5% of the transaction in the name of payment gateway fees.

So if you are thinking they have done something philanthropic when they have given you 8% coupon, remember that they are getting 15% money from the transaction. They are never at any loss.

An article by Munna Suprathik