Short Answer
To calculate profit on Daraz, start with what the customer paid, subtract commission, payment fee, handling fee, VAT, net shipping and tax withholding to get your payout, then subtract your product and packing cost. Profit is the remainder. Divide by the item price for your margin, or by cost for return on cost.
Profit on Daraz is the payout minus what the product cost you. The hard part is the payout, because it is made of many lines. Do it in the same order every time and it becomes a five-minute job.
I have sold on Daraz since 2015 and run 14 Daraz stores. The method below is what our own free calculator uses, and it was checked against real weekly statements. The numbers in the example are made up.
For the list of fees on their own, see Daraz seller fees. For reading a statement you already have, see Daraz settlement statement explained.
What Is the Formula for Profit on Daraz?
Profit = customer payment - Daraz deductions - product cost - packing cost.
Break it into three parts:
- Customer payment. Item price times quantity, plus the buyer's shipping fee, minus any seller-funded voucher.
- Daraz deductions. Commission, payment fee, handling fee, VAT, net shipping and its VAT, tax withholding, plus voucher, Coins and free shipping costs if they apply.
- Your costs. What you paid for the product, and packing.
Step 1: Look up Your Commission Rate
Find the exact category in the Daraz commission list. The table is excluding VAT, and VAT is added on top, so you will multiply by 1.15 later. See how much Daraz commission is.
Step 2: Work Out Each Fee on the Item Price
All of these use the item price, not the shipping the buyer pays:
| Fee | Calculation |
|---|---|
| Commission | Item price x category rate |
| Payment fee | Item price x 2.25% |
| Handling fee | Per-item amount x quantity |
| VAT | 15% of commission + payment fee + handling |
More on the middle two: Daraz payment fee and Daraz handling fee.
Step 3: Add the Withholding Taxes
On the statements we checked, withholding came to about 1.9 to 2.0 percent of item price for sales tax and about 1.6 to 1.7 percent for income tax. These are estimates, not legal rates. Check your own statement and FBR guidance. See Daraz seller tax withholding.
Step 4: Add the Shipping Lines
Take the shipping charge, subtract the shipping discount, and add 15 percent VAT on that net. If the buyer paid a shipping fee, it is a credit that offsets the net charge. See Daraz shipping charges for sellers.
Step 5: Subtract Your Own Costs
Take the payout from the steps above. Subtract the product cost and the packing cost per unit, times quantity. What remains is profit.
Example: A Full Order
Example only. "Store A" sells one Kitchen and Dining item at 14.8 percent commission. All figures are made up, and the handling fee of Rs 20 before VAT is an assumed amount.
| Line | Working | Amount (Rs) |
|---|---|---|
| Item price | 2,000.00 | |
| Buyer shipping fee | +180.00 | |
| Customer paid | 2,180.00 | |
| Commission | 2,000 x 14.8% | -296.00 |
| Payment fee | 2,000 x 2.25% | -45.00 |
| Handling fee (assumed) | -20.00 | |
| VAT on those three | (296 + 45 + 20) x 15% | -54.15 |
| Sales tax withholding | 2,000 x 1.95% | -39.00 |
| Income tax withholding | 2,000 x 1.6% | -32.00 |
| Shipping charge less discount | 330 - 150 | -180.00 |
| VAT on net shipping | 180 x 15% | -27.00 |
| Payout | 1,486.85 | |
| Product cost | -1,100.00 | |
| Packing cost | -60.00 | |
| Profit | 326.85 |
Daraz lines took Rs 693.15 from the Rs 2,180 the customer paid, once the buyer's shipping fee is counted. Store A keeps Rs 326.85 on a Rs 2,000 item.
How Do I Get the Margin and Return on Cost?
- Margin = profit / item price = 326.85 / 2,000 = 16.3 percent.
- Return on cost = profit / product cost = 326.85 / 1,100 = 29.7 percent.
Use margin to compare products at different prices. Use return on cost to see how hard your stock money is working.
What Do People Forget When Calculating Daraz Profit?
- VAT on commission. Using the published rate alone understates it.
- The handling fee, which is per item and matters most on cheap items.
- Withholding tax, which is deducted from the payout.
- Returned orders. A return reverses the sale, so profit on returned orders is a loss of your costs. Count your return rate.
- Voucher, Coins and free shipping costs during campaigns.
Can I Skip the Manual Maths?
Yes. The Daraz profit calculator does all of the above with the defaults described here. Enter price, cost, packing and category rate. Change any default that does not match your own statement. If you want a minimum selling price for a target profit, the Daraz selling price calculator works backwards from the same model.
If you run several stores, Seller's Revolution finance reports show fees and payouts across all of them.
FAQ
How Do I Calculate My Profit on Daraz?
Start with what the customer paid, subtract commission, payment fee, handling fee, VAT, net shipping and tax withholding to get the payout, then subtract your product and packing cost. The remainder is profit.
What Percentage Does Daraz Take from a Sale?
It varies by category and order. In the worked example above, Daraz lines took about 25.7 percent of the item price (Rs 513.15 of Rs 2,000, once the buyer's Rs 180 shipping fee is set against the shipping charge). Your number depends on your category rate, handling fee and shipping.
Is the Daraz Payout the Same as My Profit?
No. The payout is before your own costs. Subtract the product cost and the packing cost to get profit.
How Do I Find the Break-Even Price on Daraz?
Find the price at which profit is zero. The easiest way is to use a calculator that works backwards, such as the Daraz selling price calculator, then add a margin on top.
Should I Include Returns in My Profit Calculation?
Yes. A returned order reverses the sale, so include your return rate when you judge a product. The statement shows reversals as their own lines.
Sources
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