Flipkart, an India-based e-commerce platform, is a popular choice for buying and selling products across the country. Many businesses choose to sell their products on Flipkart as it has a large customer base with over 350 million registered users. This vast reach provides businesses with better brand exposure, resulting in significantly higher sales than they would otherwise achieve through their own website or physical store. Other than that, Flipkart provides a range of various tools to help sellers manage their sales such as inventory management, order fulfilment, and customer support. This helps sellers maintain customer satisfaction with minimal effort. Along with this businesses can also promote their products on Flipkart by opting for sponsored listings, targeted ads, and social media promotions to appeal to newer customers. Since Flipkart provides these many tools and functions along with immense exposure, many businesses opt for selling their products on Flipkart.
Difficulties in calculating profitability
When selling on Flipkart, a number of fees and other expenses are supposed to be paid to Flipkart for their services. This makes it difficult to calculate the profitability as various fees have to be deducted from the payment amount to get the profit margin.
The Flipkart fees include
A rate card for the Flipkart shipping fee is given below. Cointab Reconciliation determines the shipping fee for each order using the provided rate card. Likewise, all other fees are also calculated using the respective rate cards given by Flipkart. Calculating all of these fees is challenging because the weight of the product, delivery location, rate percent, and other factors need to be checked before the right fee amount can be calculated.
If fee calculations are done manually it will take too much time and the calculations might not be accurate as Flipkart has a complicated fee structure and the possibility of human error is also quite high. Checking the fee calculations and then subtracting the expenses from the payment amount requires careful effort. Due to a large number of orders, carefully calculating the profit on each order might be difficult.
Our software automatically calculates the profit margin on every order by obtaining the invoice values from the sales report, and payment values from the settlement report. It subtracts all the fees to be paid to Flipkart and the cost price from the payment amount to produce the results displaying the profit per order.
Cointab Reconciliation can easily complete this process for your business, the team has to just add the SKU details with the purchase price to get easily computed results showing your true business profitability. By analyzing these results, you can evaluate your business performance on the Flipkart marketplace and create better data-based strategies to improve your overall business performance.
In the results given below, we display the total summarized value of the sales, expenses, settlement, purchase value, profit and overall profit percentage. This helps the managers analyse the overall business performance at a glance.
Given below is the order-level view of profitability calculations. The profit margin is calculated by deducting the fees, other expenses and purchasing price from the payment amount collected. Along with that, the profit (%) made on each order is displayed in the respective row.