Saurabh Goel, a merchant exporter and founder in the FMCG space, recently shared a detailed LinkedIn post raising questions about the operational and financial implications of partnering with Swiggy Instamart for quick-commerce distribution.
The post begins by acknowledging the appeal of the model. Swiggy Instamart offers access to a large customer base, promises 10-minute delivery, and seems like a growth opportunity for emerging consumer brands. However, Goel outlines several terms of engagement that may present challenges for small and medium-sized enterprises.
Purchase Order Model With Delayed Payments
While Instamart operates on a purchase order (PO) model, Goel points out that the PO is only generated for around 2,000 units. Crucially, brands receive payment not at the time of dispatch, but only after each unit is sold. Furthermore, the actual cash flow into the brand’s account may take 37 to 40 days post-sale. This means brands need to tie up their working capital for weeks without immediate returns.
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Margin and Cost Structures
Goel lists a flat 35% platform margin and an additional 10% mandatory marketing expense per product. Delivery of goods to Instamart’s warehouses is also at the brand’s own cost, and weekly stock replenishment is expected. According to his breakdown, brands may face significant deductions and operational overheads before they even see revenue.
Advertising Spend: Mandatory & Non-Negotiable
Goel highlights that a three-month ad campaign is compulsory, regardless of performance or conversion. If stock remains unsold, it is returned at the brand’s expense, adding further financial strain.
Concerns for Small Founders
The post ends with questions many early-stage founders may be grappling with: are such partnerships actually helping to build sustainable brands, or are they effectively financing platform growth with high-risk investments?
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Goel’s post calls on other founders and FMCG stakeholders to share their experiences with platforms like Instamart, Blinkit, and Zepto, aiming to spark an open and honest discussion on the real cost of quick-commerce participation.
