Why sellers think they're profitable when they aren't
A product that costs ₹380 and sells for ₹999 looks like a great deal. But GST comes out of the price first. The marketplace takes a commission, plus fixed or closing fees and shipping, and charges 18% GST on those fees. Some orders come back, costing shipping both ways. And ads to get the sale cost money too. This calculator subtracts everything, so you see the profit you actually keep.
Profit = price ÷ (1 + GST) − product cost
− (commission + fixed fee + shipping) × 1.18
− packaging − ad spend − average cost of returnsWorked example
Where to find margin
- Returns: clearer photos, size charts and honest descriptions often cut returns more than any fee negotiation.
- Weight and dimensions: shipping fees jump at weight slabs. Slimmer packaging can drop you a slab.
- Price bands: some marketplaces charge lower fees below certain price points. Check whether a small price change moves you to a cheaper band.
- Input tax credit: if you're GST-registered, GST paid on marketplace fees can be claimed as credit, which improves the real margin.
- Your own website or WhatsApp orders: no commission, just payment gateway fees (usually around 2%) and shipping.
Plan pricing before listing with the product pricing calculator, and check volume needed with the break-even calculator.
Frequently asked questions
How much commission do Amazon and Flipkart charge?
It depends on the category and price, and changes periodically, typically somewhere between a few percent and over 20%, plus fixed and shipping fees. Check your seller dashboard's current rate card.
Is GST charged on marketplace fees?
Yes, 18% GST applies to commission and other fees. Registered sellers can usually claim it as input tax credit.
How do returns affect profit?
Each return usually costs shipping both ways plus packaging, and sometimes a damaged product. The calculator spreads that cost across all orders.