Short Answer
Profit margin is profit divided by the selling price, shown as a percentage. For a Daraz order, profit is the net payout after fees and taxes, minus your product and packing cost. A 25% margin means you keep Rs 25 of every Rs 100 of price.
Profit margin is the part of the selling price that you actually keep, expressed as a percentage: profit divided by selling price. It answers the question "of every Rs 100 a customer pays for this item, how much is mine?"
How Do I Work It Out on Daraz?
Start with the selling price, subtract everything Daraz takes (commission, payment fee, handling fee, shipping and taxes) to get the net payout, then subtract your product cost and packing. What is left is profit. Divide by the selling price.
Worked Example
Example: Store A sells at Rs 1,000. Net payout after Daraz lines is Rs 760 (made up). Product cost is Rs 450 and packing Rs 60, so profit is 760 minus 510 = Rs 250. Margin is 250 divided by 1,000 = 25 percent.
If the same item is returned once in ten orders, profit across the ten falls sharply, so use margin together with your return rate.
Common Mistakes
- Subtracting only commission and calling the rest profit.
- Calculating margin on cost instead of price, which is markup.
- Ignoring returns, advertising and the tax lines.
Related Terms
Markup, break-even, commission. The profit calculator does the full per-order math, and how to calculate profit on Daraz walks through it.
Questions
How do I calculate profit margin?
Divide profit by the selling price and multiply by 100. Profit here is payout after fees and taxes minus product and packing cost.
What is a good profit margin on Daraz?
There is no single answer. It depends on category, return rate and how much you spend on advertising. Calculate your own real margin per order.
Is margin the same as markup?
No. Margin is measured on the selling price, markup on the cost. See the markup page.
Sources
Related
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