Blog
Diligence and metrics
Your Amazon and Quick Commerce Revenue Is Not Your Revenue: How Investors Rebuild a Marketplace P&L Before They Price Your Round
A ₹1 Cr month on Amazon and quick commerce can mean ₹38 lakh of contribution or ₹8 lakh. Investors know the difference and will rebuild your P&L to find it. Here is how, and how to show it first.
Published 27 September 20266 min read
The short answer
Investors do not value marketplace sales at the number on your Seller Central dashboard. They net out GST, returns, referral and fulfilment fees, storage, ads, visibility fees and claims, then look at TACoS, payment cycles and how much of your sales rank organically. Brands that present this rebuilt view themselves, channel by channel, get priced on their real margin instead of the investor's worst-case guess.
Who this is for: Consumer brands with 40% or more of revenue from Amazon, Flipkart or quick commerce platforms, preparing for a seed, pre-Series A or Series A round.
Summary: what most founders miss
- "Ordered product sales" on Amazon is a gross number. Net realisation after fees, returns and GST is often 45% to 60% of it before ads.
- TACoS (ad spend ÷ total sales) tells investors whether your marketplace sales are organic or rented. Rising TACoS with flat sales is the pattern they fear most.
- Quick commerce revenue is usually booked at the platform's or distributor's purchase price, not MRP, and the real costs sit in visibility fees, claims and payment cycles.
- Settlement reports, not dashboards, are the source of truth. Investors reconcile them to your books and GST returns.
- A marketplace-heavy brand can still get a strong multiple if it shows healthy channel CM2, falling TACoS and organic rank on category keywords.
Marketplaces and quick commerce have built some of India's fastest-growing consumer brands. They have also produced some of the most disappointing diligence calls, because the revenue that looks so strong on a dashboard shrinks sharply once every fee, ad and claim is netted out. Investors have seen enough of these to rebuild your numbers automatically. The founders who get the best outcomes are the ones who do it first.
Why investors do not trust marketplace revenue as reported
Three reasons. The first is that dashboards report gross sales at the selling price, including GST, before returns. The second is that a large part of marketplace sales is bought through ads on the same platform, so revenue and marketing spend are tied together in a way that D2C revenue is not. The third is that the brand does not own the customer: it cannot remarket to them, and the platform can change fees, search ranking or ad pricing at any time.
None of this makes marketplace revenue bad. It makes it revenue that needs to be explained.
How investors rebuild ₹1 Cr of Amazon sales
| Line | ₹ lakh | % of ordered sales | Note |
|---|---|---|---|
| Ordered product sales (dashboard) | 100.0 | 100% | Includes GST |
| Less: GST (18% goods, included in price) | −15.3 | 100 × 18/118 | |
| Less: returns, cancellations, refunds | −6.8 | 8% of net sales, category dependent | |
| Net revenue | 77.9 | 78% | |
| Less: landed product cost | −27.3 | 35% of net revenue | |
| CM1 | 50.6 | 51% | |
| Less: referral fee | −8.6 | Category and price-band dependent | |
| Less: closing fee, weight handling or FBA fees | −7.4 | ||
| Less: storage, long-term storage, removal fees | −1.2 | ||
| Less: return processing and damaged returns written off | −1.9 | ||
| CM2 | 31.5 | 31.5% | About 40% of net revenue |
| Less: Sponsored Products, Brands and Display ads | −14.0 | TACoS 14%, blended ROAS about 7.1x on gross sales | |
| Less: coupons and deal fees funded by brand | −2.0 | ||
| CM3 | 15.5 | 15.5% | About 20% of net revenue |
Swipe the table sideways to see all columns.
Illustrative. Amazon fee structures vary by category, price band and fulfilment model, and change periodically. Use your own settlement reports.
The founder's deck said "₹12 Cr annualised on Amazon". The investor's model now says "₹9.3 Cr of net revenue, ₹3.8 Cr of CM2, ₹1.9 Cr of CM3". Both are true. Only one is what you get priced on.
How investors rebuild quick commerce revenue
Quick commerce works differently. In most arrangements, the brand sells to the platform's seller entity or to a distributor who services the dark stores. The brand books revenue at that purchase price, which is already well below MRP. The real costs sit elsewhere.
| Line | Typical range | What founders miss |
|---|---|---|
| Platform or distributor buying margin off MRP | 25 to 40 | Varies by category and brand strength |
| GST | Included in MRP | Net revenue is after GST |
| Distributor margin, if one is used | 5 to 10 | Often on top of platform margin |
| Visibility and listing fees, banner and search ads | 6 to 15 (of brand's net revenue) | Frequently booked as "marketing" and left out of channel CM |
| Damage, expiry and shortage claims | 1 to 4 | Deducted from payments months later |
| Launch and marketing contributions, free units | 1 to 3 | Often not tracked by SKU |
| Payment cycle | 30 to 75 days | Shows up as working capital, not margin |
Ranges reported by Indian consumer brands as of 2026. Terms differ by platform, city, category and negotiating strength. Your contracts and debit notes are the source of truth.
What investors want to see from a marketplace-heavy brand
| What to show | Why it matters | Good sign |
|---|---|---|
| Channel P&L to CM3, monthly, 12 months | Shows real margin by platform | CM2 stable or rising as sales grow |
| TACoS and blended ROAS by month | Shows paid dependence | TACoS falling while sales grow |
| Organic share of sales (sessions or orders not from ads) | Shows brand pull | Above 50% on the lead ASINs |
| Rank on top 10 category keywords | Shows defensibility | Organic page 1 on 3+ generic keywords |
| Share of sales from top 3 SKUs | Shows concentration risk | Under 60% |
| Reconciliation: settlement reports to books to GST returns | Proves the numbers | Differences under 2% and explained |
| Payment cycle and claims history by platform | Shows cash reality | Claims under 2% of sales |
When is marketplace dependence a deal-breaker?
Rarely on its own. It becomes a deal-breaker when three things combine: more than 75% of revenue on one platform, TACoS rising faster than sales, and CM2 on that platform below 15%. At that point, an investor sees a business whose growth is rented from a platform that can raise the rent at will.
The fix is not always to leave the marketplace. It is to show that your marketplace business can stand on its own margin, and that a second channel is growing fast enough to reduce the risk within 12 to 18 months.
Case study
The Amazon-first brand that reframed its round
Home care brand, ₹1.6 Cr monthly revenue, 70% Amazon, 20% quick commerce, 10% own website
Situation
The founder was raising ₹10 Cr for pre-Series A. Four funds passed in the first round of meetings, each saying some version of "too marketplace-dependent".
What was missed
The deck showed Amazon revenue at ordered product sales and marketing as a single line. Investors assumed the worst: that most sales were bought with ads and that margin after fees was thin.
What changed
The founder built a channel P&L from settlement reports. It showed Amazon CM2 of 34% of net revenue, TACoS falling from 19% to 12% over 12 months, and 58% of sales on the top five products coming from organic search. It also showed quick commerce CM2 of 11%, with a plan to fix pack sizes and pricing. The pitch changed from "we will build D2C" to "we have a profitable marketplace engine and will use this round to fix quick commerce and scale modern trade".
Outcome
Two of the four funds re-engaged. One led the round at a lower multiple than the founder hoped but with a clean term sheet. The Series A conversation 14 months later was about channel mix, not about whether the Amazon business was real.
The lesson
Investors discount what they cannot see. A marketplace business shown in full, with its weaknesses named, is priced higher than one they have to reconstruct themselves.
Illustrative case. Figures are representative of patterns in Indian consumer rounds, not a specific company.
Related reading: CM1, CM2, CM3: The Contribution Margin Math and The Working Capital Trap. If you are raising in the next six months, share your channel P&L and deck with us.
Read next: how investors value consumer brands and why startups fail due diligence. Preparing to raise? See how our consumer brand fundraising support works.
Questions founders ask us
Should I report Amazon revenue gross or net in my pitch deck?
Net. Show net revenue after GST, returns and cancellations as your headline. If you want to show GMV, put it in a bridge that clearly walks from GMV to net revenue. Investors will make this conversion anyway.
What TACoS do investors consider healthy for a consumer brand on Amazon?
It depends on category and stage. For an established brand, TACoS of 8% to 15% with stable or falling trend is generally seen as healthy. Above 20% suggests most sales are paid. The trend matters more than the level.
How do investors treat quick commerce revenue booked through a distributor?
They look at your sale price to the distributor as revenue, and then check the distributor's payment cycle, claims, and any support you fund. They will also ask what share of your quick commerce sales are sustained without visibility spend.
Is it a problem if one platform is more than half of my revenue?
It is a risk, not a disqualifier. Investors will want to see healthy CM2 on that platform, organic rank on key searches and a growing second channel. Above 75% in one platform, expect a valuation discount.
What documents will investors ask for on marketplace sales?
Monthly settlement or payment reports for 12 to 24 months, advertising reports, the debit note and claims register, and a reconciliation of platform sales to your books and GST returns.
About the author
Written by the Alphamark Ventures team, a fundraising advisory firm helping founders raise seed, angel and pre-Series A rounds, with a focus on consumer, consumer tech and consumer AI. Figures are as of the date shown and are for general information; this is not legal, tax or investment advice.
Raising in the next 6 months?
We typically work with brands doing ₹30L+ in monthly revenue raising ₹1 Cr to ₹15 Cr. Share your deck and numbers.
How our consumer and d2c brands support worksKeep reading
CM1, CM2, CM3: The Contribution Margin Math That Quietly Kills Consumer Brand Rounds in Diligence
Rounds stall in diligence when CM2 turns out to be 18%, not the 32% in the deck. How investors calculate CM1, CM2 and CM3, the benchmarks they use, and the seven errors that cause the gap.
Why Good Brands Fail Due Diligence: The 9 Data Room Problems Investors Find in Week Two, and the Real 6 to 10 Week Closing Timeline
Term sheets rarely die because the brand is bad. They die because diligence finds something the founders did not know or did not say. The nine problems we see most, a data room checklist, and a realistic closing timeline.
What investors look for before writing a cheque
Beyond the deck: the numbers, documents and founder behaviour seed and pre-Series A investors check before they commit.