Blinkit Inventory Model: A Cure For The Cash Burn Problem?

When Eternal’s quick commerce arm Blinkit hinted at moving to an inventory led model, the first reaction was this would increase its up front costs and put a lot of pressure on driving sales. 

And earlier this week, reports indicated the platform has already informed sellers about the change. In this new inventory model, Blinkit will directly purchase goods from sellers, rather than facilitating third-party listings on its marketplace. 

This is a key reason for Eternal’s recent cap table changes to become an Indian-owned-and-controlled company (IOCC). This allows the company regulatory room to own inventory. If true, it’ll be the second to do so in the Indian quick commerce space after Zepto. 

Inventory Switch And Revenue Impact

Blinkit has until now operated under a marketplace model, which caps its take rate at just 18%, a figure that reflects only the value it creates as a platform, not the value of the goods themselves. 

This has limited Blinkit’s ability to improve margins, negotiate favourable supplier terms, or meaningfully control pricing. Zepto, by contrast, runs an inventory model that allows it to book the full sale value, giving it a significantly higher take rate of about 23% and much greater margin control. 

The change in take rates has a huge impact at Blinkit’s scale. With Blinkit’s expected gross order value (GOV) of INR 57,900 Cr for FY26, even a modest 50–110 basis point improvement in margin, enabled by owning inventory, could result in an incremental INR 290 Cr to INR 635 Cr in operating gains. 

In a high competitive intensity segment like quick commerce, this additional cash can make a material difference. 

At present, Blinkit’s current unit economics are unsustainable. According to a study, the platform’s customer acquisition cost (CAC) stands at INR 1,240, while customer lifetime value (CLV) is stuck at INR 890, meaning that adding new customers is eroding margins.  

Compounding this is a churn rate of 47.35%, with over 60% of departing users switching to Zepto for better perceived value and service, the study claimed.

What’s In It For Blinkit?

Transitioning to an inventory model might offer Blinkit the tools to address these issues. By controlling stock, the quick commerce platform can implement dynamic pricing, curate high-frequency SKUs, and expand into margin-rich private labels. 

Rather than simply facilitating transactions as a marketplace,  Blinkit would gain full control over restocking speed, shelf life, and assortment planning. 

These are critical for boosting the average order value, which as we pointed above, needs a push. On the private label side, Blinkit could see higher customer retention, and repeat purchases, but for now no plans for a private label have been announced.

It would be hard to run an inventory-led model without a significant contribution from owned brands or private labels, which reduces the reliance on third-party procurement and improves margins further.  

Plus, inventory ownership could also potentially mean that Blinkit does not have to compete on discounts and rewards, which add to costs even as they drive customer engagement. 

This is one of the reasons why Zepto is managing to compete with the older players despite running fewer dark stores. The inventory model efficiencies translate directly into reduced working capital requirements and improved cash flow, according to Blinkit  

Eternal CFO Akshant Goyal earlier had said that the capital needed would be less than INR 1,000 Cr—just 3–4% of Blinkit’s FY25 GOV, a relatively modest outlay for a potential uplift in performance.

Furthermore, owning inventory unlocks other revenue opportunities that are simply unavailable under the marketplace model. These include real-time pricing for fresh produce, bundled offerings, exclusive launches and merchandising, all of which can boost both basket size and frequency of purchase. 

At the moment, no FMCG or retail brands create products specifically for Blinkit, but if this becomes a viable channel, it could be a new launchpad for brands, just as Amazon did in the US in the early 2000s.   

In a category where margins are wafer-thin and operational overheads steep, such levers are critical to reaching sustainable profitability. JM Financial forecasts that this shift could enable Blinkit to reach EBITDA break-even as early as the December 2025 quarter, well ahead of prior estimates. 

Given the company’s Q4 FY25 EBITDA loss of INR 178 Cr, projected turnaround is both timely and essential.

More Control, More Risks? 

There is a caveat. These upsides come with a host of risks that are far more complex and capital-intensive than running a marketplace.

At the heart of the risk is inventory itself. Unlike a marketplace where unsold goods sit with third-party sellers, Blinkit must now manage and store its own products. In a high-churn, quick commerce environment, especially one dealing with perishables and fast-moving consumer goods, this introduces the very real threat of wastage. 

Goods may expire, become damaged, or simply fall out of demand before they leave the shelves, forcing write-downs that hit the bottom line.

It is pertinent to note that Eternal’s B2B supply platform Hyperpure could provide Blinkit a significant edge in managing perishable inventory as it shifts to an inventory-led model. 

Hyperpure claims to serve over 1 Lakh restaurants, cloud kitchens and HoReCa outlets in FY25 via 11 warehouses across India. It has also built infrastructure for cold chain logistics and real-time replenishment, which is critical for handling perishables like dairy, meat, and fresh produce.

Blinkit could mitigate some of the risks in inventory management thanks to Hyperpure’s expertise in this area, but this still leaves the company open to some perils in terms of cash flow.

The inventory model switch means a fundamental change to the company’s cash flow dynamics. Blinkit must now purchase goods and pay for them up front or under the deferred payment terms that are typically offered to wholesalers. In either case, Blinkit is purchasing some goods before any revenue is realised. 

If demand slows unexpectedly or forecasting misses the mark, the company could find itself sitting on piles of unsold stock or, conversely, dealing with stock-outs that frustrate customers. Both scenarios strain liquidity and hinder operational agility. 

This is one persistent risk in the inventory-led model and Blinkit will have to work hard to build and retain commercial agreements with retail brands and FMCG manufacturers in the early days. 

On the vendor side, while direct procurement could improve Blinkit’s bargaining position, it also brings new exposure to supplier-side risks. From delayed deliveries to quality control issues, the company must now manage relationships that were previously buffered by third-party sellers. 

This again requires investment in procurement processes and supplier reliability to ensure that products are delivered on time and to standard.

Poor forecasting can lead to overstocking, and clearing excess inventory often means heavy discounting, undermining the very margin gains Blinkit is trying to capture. Small forecasting errors can result in significant losses, particularly when product shelf lives are short.

Is Blinkit Maturing? 

The fact that Blinkit is moving away to an inventory holding model is a sign of maturity. Typically, startups prefer running marketplaces since this is more flexible and allows them to enter and exit verticals easily. Inventory model means Blinkit is betting that it can sell what it buys from the market. 

However, the inventory-led structure is less flexible and locks up capital and makes the cost of strategic missteps far higher.

Incidentally, the switch will also change how the market evaluates Blinkit and consequently Eternal. Many of the projections have been based on being a marketplace, but now Blinkit is essentially running its own store. So could this result in a correction — in either direction — in Eternal’s stock price? 

Two days after the report on Blinkit communicating the changes to its sellers, the Eternal stock opened at INR 271.90, its highest opening position in the past six months, with consistent gains in every trading session. This positive momentum along with Blinkit’s switch could unlock the next wave of value addition for Eternal.

Edited by Nikhil Subramaniam