Your selling price is not your profit. Here’s the math.
Revenue is the money a customer pays. Profit is what remains after the costs of making that sale. Confusing the two makes it easy to run a busy shop that leaves very little money behind.
Start with one order
Write down your selling price, product cost, packaging, shipping you absorb, platform commission and payment fees. Add advertising or other per-order costs if you know them. Use a consistent approach to tax and check your obligations with a qualified adviser.
A worked example
| Item | Amount |
|---|---|
| Customer pays | ₹1,000 |
| Product cost | ₹400 |
| 10% platform fee + ₹10 fixed fee | ₹110 |
| Shipping you pay | ₹80 |
| Packaging | ₹30 |
| Profit before other expenses and tax | ₹380 |
Total entered costs are ₹620. Subtracting them from ₹1,000 leaves ₹380. The profit margin is ₹380 ÷ ₹1,000 × 100 = 38%.
Margin and markup are different
Margin divides profit by selling price. Markup divides profit by cost. If something costs ₹600 and sells for ₹1,000, the profit is ₹400: a 40% margin and approximately 66.7% markup. Always check which measure a calculator or supplier is using.
A discount changes more than revenue
In the example above, a 20% discount brings the selling price to ₹800. A 10% fee plus ₹10 becomes ₹90. The other costs stay at ₹510, leaving ₹200 profit. The selling price fell 20%, but profit fell from ₹380 to ₹200—about 47.4%.
Account for the costs that arrive later
Returns, damaged goods, monthly subscriptions and unsold inventory may not appear in a single-order calculation. Review actual results regularly and allocate overhead reasonably. Manglo’s calculator is a planning aid; it does not replace bookkeeping or official marketplace statements.
Check your numbers →