SHG Selling Through an Intermediary: What to Check

Before an SHG sells through a trader, aggregator, shop chain or online platform, check six things: is it an outright purchase or consignment, what price or commission you get, when you will be paid, who bears returns and damage, what deductions apply, and whether you are tied to that buyer. Then compare the money that actually reaches the group with what you earn selling directly. Get the terms in a signed agreement. Information here is as of November 2026; scheme channels and platform terms change, so confirm with your SRLM staff, block office or the platform.

Who the intermediaries are

Under DAY-NRLM, eSARAS is the official online marketplace for products of women SHGs and their federations, and it also acts as a seller on the ONDC network. A SARAS collection storefront on the GeM portal lets government departments buy SHG products, and SARAS melas are organised every year. Your SRLM's block or district team can tell you how to list.

The six-point checklist

1. Outright sale or consignment

In an outright sale, the buyer owns the goods once delivered and owes you the agreed price. In consignment, you are paid only for what sells; unsold, expired or damaged stock may come back or be written off at your cost. Consignment shifts risk to the group, so the price should be higher.

2. Price or commission

Ask for the final amount per unit the group will receive, not just the retail price or the commission percentage. Commissions may carry GST; if the intermediary charges GST on its commission or service fee, the deduction is larger than the headline rate. Check the GST on a fee with the GST calculator.

3. Payment period

Write the number of days for payment from delivery or sale, the mode (bank transfer to the group's account), and what happens if payment is late. Every month of delay has a cost; see the cost of 30-day credit terms. If the group or its enterprise is registered on Udyam as a micro or small enterprise, the MSMED Act generally requires buyers to pay within the agreed period, not exceeding 45 days, and delayed-payment claims can be filed on the MSME ODR portal (odr.msme.gov.in). Whether that applies to your deal depends on your registration and the contract.

4. Returns, damage and quality rejection

Who pays if goods break in transit, expire on the shelf or fail a quality check? Ask for written quality standards and a time limit for rejections. Insist on a joint check or photos at delivery.

5. All deductions

List every charge: listing or registration fee, packaging the intermediary supplies, labels and barcodes, transport, storage, promotions, payment gateway fees, penalties. Add them up per unit.

6. Exclusivity and term

Can you still sell at melas, to local shops or on eSARAS? Is there a minimum quantity? How can either side end the arrangement, and what happens to stock with the intermediary then?

Worked example: pickles through three routes

An SHG makes pickle jars costing ₹70 each to produce (ingredients, jar, label). It sells 500 jars a month.

Route A: Direct at local market and melas

• Price ₹150; stall, travel and members' time costs about ₹15 a jar
• Net per jar: ₹150 − ₹70 − ₹15 = ₹65
• But only about 200 jars a month sell this way

Route B: Aggregator on consignment

• Retail ₹180; aggregator commission 30% = ₹54; GST at 18% on the commission = ₹9.72
• Group receives ₹180 − ₹54 − ₹9.72 = ₹116.28
• Packaging upgrade the aggregator requires: ₹8 a jar
• Expected unsold returns 10%: of 500 jars sent, 450 sell
• Revenue: 450 × ₹116.28 = ₹52,326
• Cost: 500 × (₹70 + ₹8) = ₹39,000
• Net: ₹52,326 − ₹39,000 = ₹13,326, about ₹26.65 per jar sent, paid 45 days after sale

Route C: Trader outright purchase

• ₹105 a jar, all 500 bought, pays in 30 days
• Net: 500 × (₹105 − ₹70) = ₹17,500, or ₹35 per jar

The retail price under Route B looks best, but after commission, GST, packaging and returns, the outright trader gives more money for the same 500 jars. Many groups combine routes: direct sales for the best margin and an outright buyer for the rest. Your own numbers will differ; the method is what matters. For pricing basics, read markup vs profit margin.

Red flags

• Large upfront "registration", "membership" or "listing" fees for promised bulk orders
• No written agreement, or an agreement only in a language members cannot read
• Payment to an individual's account rather than the group's
• Unlimited right to reject or return goods without inspection
• Pressure to sign quickly or to sell only to them
• Asking for the group's bank passbook, cheque book or OTPs

Check new buyers with your SRLM staff, other SHGs who supply them and the federation. Report fraud at cybercrime.gov.in or 1930.

Before you sign: a short list

1. Get the agreement in writing, in a language all members understand.
2. Read it aloud at an SHG or federation meeting and record the decision in the minutes.
3. Keep a delivery register: date, quantity, batch, signature of the receiver.
4. Match each payment against deliveries; follow up in writing on any shortfall.
5. Review the arrangement after three months using actual net income per jar or piece.

Keep the marketing income in the enterprise's own records, separate from SHG savings, as explained in recording member contributions to a shared unit. For credit to expand production, see NRLM SHG loans.

Key takeaways

• Know whether the deal is outright or consignment; consignment moves the risk of unsold goods to the group.
• Compare the final amount per unit reaching the group after commission, GST on fees, packaging, transport and returns.
• In the example, a ₹105 outright price beat a ₹180 retail consignment route: ₹17,500 vs ₹13,326 a month.
• Write the payment period, rejection rules, deductions, exclusivity and exit into a signed agreement.
• Use government channels such as eSARAS, the SARAS collection on GeM and SARAS melas through your SRLM, and avoid buyers who ask for upfront fees.