Understanding true profitability in Indian online marketplaces requires accounting for multiple cost layers that are often hidden or overlooked by new sellers. This calculator follows a systematic methodology to reveal your actual profit margins. Start by entering your total product cost—this includes not just the purchase price from your supplier or manufacturer, but also packaging materials (boxes, bubble wrap, branded packaging), labeling costs, any product customization, and even a proportional allocation of bulk shipping costs if you import inventory. Many sellers forget to include these ancillary costs, leading to inflated profit expectations. Next, input your selling price—the amount customers see on the marketplace, which is typically GST-inclusive in India. The calculator needs this to work backwards and separate the GST component (which isn't your revenue) from the base price. Then comes marketplace commission, which varies significantly by platform and product category. Amazon India charges anywhere from 5% (large appliances) to 25% (fashion accessories), Flipkart has similar category-based structures, and Meesho ranges from 0% (promotional) to 20%. Always verify current rates in your seller dashboard as these change periodically. Beyond commission, you must account for fulfillment costs: if using FBA (Fulfillment by Amazon), F-Assured (Flipkart), or Meesho Logistics, these services charge per-unit fees based on product size, weight, and sometimes destination zone. Self-shipping sellers need to factor in courier charges, packaging materials, and labor costs for order processing. Payment gateway fees are another unavoidable expense—typically 2% to 3% of the transaction value, charged by payment processors for handling digital payments. Don't forget return logistics costs, especially in high-return categories like fashion where 15-30% return rates are common. The calculator also handles GST separation correctly: if your ₹1,000 selling price includes 18% GST, your actual revenue is ₹847 because the ₹153 GST is collected on behalf of the government and must be remitted (minus input tax credit). After deducting all these expenses from your base revenue, you arrive at net profit—the actual amount you earn per sale. The calculator expresses this as both absolute rupee value and as a percentage margin (profit ÷ selling price × 100). This percentage is critical for comparing profitability across products with different price points. Industry benchmarks suggest 20-40% margins are healthy for sustainable eCommerce businesses, with variation by category: high-volume, low-margin products might operate at 15-20%, while niche or private label products can achieve 40-60%. Use the calculator iteratively: if margins are too thin, experiment with higher selling prices or find ways to reduce costs (negotiate better supplier rates, optimize packaging, switch fulfillment methods). If margins are very high (50%+), consider whether you're priced too high and missing sales volume—sometimes reducing price to expand market share generates more absolute profit despite lower percentage margins. The tool also enables marketplace comparison: keep product cost and selling price constant, but change commission and fulfillment fees to match different platforms. This reveals which marketplace is most profitable for your specific product, informing inventory allocation and marketing focus decisions. For advanced users, integrate this calculator into a larger financial model that includes marketing spend (advertising costs per sale), customer acquisition cost, overhead allocation, and working capital requirements to get a complete picture of business profitability beyond just product-level margins.