Most ecommerce sellers don't know their actual profit margin. This guide walks you through calculating true profit after all platform fees, shipping, packaging, and taxes.
A seller selling at ₹599 thinks they're making ₹200 profit. After all deductions, it's often ₹50–₹80. Here's how to calculate correctly.
The True Profit Formula
Net Profit = Selling Price − COGS − Platform Commission − Shipping Fee − Packaging − GST Payable − Returns ProvisionComponent Breakdown
1. Cost of Goods Sold (COGS)
Your manufacturing or wholesale cost including taxes.2. Platform Commission
| Platform | Commission Range | |----------|----------------| | Meesho | 0–18% (category dependent) | | Flipkart | 5–25% | | Amazon | 5–15% + closing fees |3. Shipping Fee
Meesho often charges ₹55–₹100/order depending on weight and zone.4. Packaging
Poly mailers: ₹3–₹8 | Boxes: ₹15–₹50 | Tape/materials: ₹2–₹55. GST Payable
After claiming ITC, you pay GST on value-added margin.6. Returns Provision
With 15% return rate and ₹150 two-way logistics cost: Returns provision per order = 15% × ₹150 = ₹22.50Example: ₹599 Kurti Calculation
| Item | Amount | |------|--------| | Selling Price | ₹599 | | − COGS | ₹250 | | − Meesho Commission (8%) | ₹48 | | − Shipping (Meesho charges buyer, seller net) | ₹0* | | − Packaging | ₹8 | | − GST (net payable) | ₹15 | | − Returns Provision | ₹23 | | Net Profit | ₹255 |
*Meesho charges shipping to buyer; confirm your category specifics.
Use a Spreadsheet
Build a per-SKU profitability calculator in Google Sheets. Input COGS, platform, and selling price — it auto-calculates margin. Never launch a product without this analysis.