E-commerce Profit Calculation Guide for Pakistan
Calculate real product profit after marketplace fees, COD returns, advertising, delivery and payment costs.
Real product profit equals collected revenue minus product cost, platform and payment fees, fulfilment, advertising, expected returns, packaging, taxes and overhead. Revenue from placed orders is not the same as collected revenue from delivered orders.
What to remember
- ✓ Calculate contribution profit per delivered order.
- ✓ Include COD return and failed-delivery losses.
- ✓ Separate profit from cash flow and marketplace settlement timing.
Begin with collected sales
For COD businesses, placed orders can exaggerate performance. Build the calculation from delivered and collected orders, while tracking cancelled, refused and returned parcels separately.
Discounts, vouchers and platform-funded promotions should be assigned according to who actually bears their cost. Use the settlement statement rather than the storefront price alone.
Include every variable cost
Product cost, commission, payment fee, shipping contribution, packaging and per-order advertising reduce contribution profit. Return shipping and unrecoverable packaging should be spread across successful deliveries.
For example, if one in five dispatched parcels fails, the successful orders must economically cover the failed-delivery cost unless the price or process changes.
- Product and inbound freight
- Marketplace or payment commission
- Outbound and return courier cost
- Packaging
- Advertising cost per acquired order
- Refunds, damage and other leakage
Do not ignore fixed costs and cash timing
Software, staff, storage, internet, equipment and professional services are fixed or semi-fixed costs. Contribution profit shows whether each sale helps, while net profit also allocates these operating costs.
A profitable month can still create a cash shortage when inventory is paid before settlements arrive. Track inventory lead time, settlement delay and the cash tied up in returns.
Use scenarios before setting a price
Calculate expected, conservative and break-even cases. Vary return rate, ad cost, supplier cost and discount instead of assuming every variable remains stable.
Reconcile calculator results with actual platform, courier and payment statements every month. Update the model when a category commission or commercial term changes.
Limitations and responsible use
Platform agreements, taxes, courier charges and return behaviour vary by seller. Reconcile estimates with current contracts and actual statements.
Sources and further verification
Sources are provided for verification. A link does not imply endorsement, and official rules may change after our review date.