E-Commerce Economics

E-commerce Profit Calculator

Don't be fooled by high revenue. Calculate your true Net Profit Margin per unit by stripping away shipping, payment gateway fees, and marketplace commissions.

Unit Economics

Final price paid by customer.

Manufacturing/Sourcing cost per unit.

e.g. Razorpay (2%)

Amazon/Flipkart commission

True Unit Profit

Net Profit Per Unit

₹779.10

51.97% Net Margin
Gross Profit (Price - COGS)₹1,049.00
Shipping Cost-₹120.00
Payment Gateway Fee-₹29.98
Marketplace/Platform Fee-₹119.92

Gross Margin vs Net Margin

  • The Gross Margin Illusion: Dropshippers often boast about buying a product for ₹400 and selling it for ₹1400, claiming a massive ₹1000 "profit" (Gross Margin). This is misleading because it ignores operational costs.
  • Hidden Drains: To process that ₹1400 payment, Razorpay will take ₹28 (2%). To ship the product across India, logistics (like Delhivery) will charge ₹120. If you sell on Amazon, they will charge a category commission (e.g., 8%) taking another ₹112.
  • The True Net Profit: Your actual take-home profit is only ₹740. And this still hasn't factored in Marketing (Ad Spend) or RTO (Return to Origin) losses, which typically eat away another 30% of your margins in India!
  • Pricing Strategy: If your Net Margin falls below 20% before ad-spend, your e-commerce business is highly vulnerable to bankruptcy from ad-cost fluctuations. You must either raise the selling price or negotiate cheaper bulk shipping rates.