What this tool helps you decide
Model how a selling price becomes contribution after discounts, GST, expected returns and variable costs. This supports pricing and marketplace decisions where a simple markup on purchase cost misses important deductions.
How to use it
- Decide whether the list price includes GST. The engine applies the customer discount once and separates tax before measuring revenue. Use costs net of recoverable input GST, including any non-recoverable tax in the appropriate cost.
- Returns represent fully refunded dispatches. Physical and fixed-per-dispatch costs remain incurred; the model does not assume returned stock is recovered or resold. Add reverse logistics where needed.
- Check the percentage-fee basis. All three percentage inputs use the same selected basis; marketplace statements with different bases or fee-specific refunds need a separately allocated cost model.
- Enter advertising per dispatch and a percentage only when both are intentionally applicable. Set scenario volume and fixed costs for the same period, then choose a contribution-margin target and any additional contribution requirement.
Understanding the results
Receipts include retained GST, but revenue and contribution do not. The breakdown removes tax, then variable costs. Percentage fees are part of variable costs and must not be deducted twice.
Contribution margin divides contribution by net realized revenue. Markup divides it by variable costs. These percentages use different denominators and are not interchangeable.
Break-even list price covers modelled variable costs. The target price meets the selected margin plus additional contribution; fixed costs instead affect period profit and break-even dispatches. An unavailable target signals infeasibility within the solver’s scope.
FOLLOW THE NUMBERS
A worked example
This fixed example is separate from your live inputs. It uses the editable defaults.
- ₹1,000 exclusive list price after 10% discount is ₹900. With 5% fully refunded dispatches, net ex-GST revenue is ₹855; retained receipts are ₹1,008.90 including ₹153.90 GST.
- Fixed-per-dispatch variable costs total ₹420. Payment and commission fees of 12% on ₹900 are ₹108. Total variable costs are ₹528.
- ₹855 − ₹528 = ₹327 contribution, or 38.2456% of net revenue. At 100 dispatches less ₹20,000 fixed costs, period profit is ₹12,700.
| Measure | Example value |
|---|---|
| Contribution per dispatch | ₹327.00 |
| Net realized revenue excluding GST | ₹855.00 |
| Receipts after expected refunds | ₹1,008.90 |
| GST in retained receipts | ₹153.90 |
| Variable costs per dispatch | ₹528.00 |
| Percentage fees | ₹108.00 |
| Contribution margin | 38.25% |
| Markup on variable costs | 61.93% |
| Break-even list price | ₹562.25 |
| Target list price | ₹787.63 |
| Dispatches to cover fixed costs | 62 |
| Period profit after fixed costs | ₹12,700.00 |
Common business scenarios
A marketplace seller evaluating a discount
Compare lower realized revenue with fees on the selected basis. A fee on pre-return discounted value does not fall proportionally when refunds rise.
A direct-to-consumer brand with returns
Inspect the no-returns counterfactual and enter reverse-logistics costs. Do not interpret refunded revenue as an equal reduction in every cost.
A service or product launch with overhead
Use contribution per dispatch to evaluate fixed-cost coverage at the planned volume. A profitable unit can still yield a period loss at low volume.
Assumptions and limitations
All displayed unit quantities use a dispatched unit, not only successful retained orders. Changing that denominator without adjusting costs would misstate profitability.
The solver holds rates and costs constant as price changes. Demand response, negotiated fee bands, partial refunds and recovered inventory are not predicted.
Fee-basis definitions
List basis is the entered pre-discount number, including GST if the price includes it. Discounted basis excludes GST and precedes returns. Inclusive basis includes GST and precedes returns. Net basis excludes GST and follows refunds. All three percentage fees share the selected basis. Fee-specific refunds or different bases need separately allocated costs.
Numerical solver
Contribution = net revenue − variable costs. Bisection finds the minimum list price meeting zero contribution or the selected margin plus additional target contribution, rounded upward to paise. A non-positive revenue slope after fees makes the target infeasible. Fixed costs affect period profit and break-even dispatches, not the per-unit target.
Frequently asked questions
Is GST counted as profit?
No. Output GST is separate from revenue and contribution.
Why is a target unavailable?
Fees, discounts, returns or desired margin may leave no feasible solution within the numerical bound.
How is this different from a margin calculator?
It models cost components, fee bases, taxes, expected returns, fixed costs and a numerical price target.
Are returns counted twice?
No. Returns reduce realized revenue and retained receipts. Per-dispatch physical costs remain incurred. The no-returns scenario is a separate comparison, not another deduction.
Does target price cover fixed costs?
The per-unit solver targets contribution before fixed costs. Fixed costs are evaluated separately through period profit and break-even dispatch volume.
Can I use different bases for commission and payment fees?
The current model uses one selected basis for all percentage fees. If your provider uses different bases, allocate the costs separately or use a more detailed settlement model.
What to do next
Reconcile the cost and fee assumptions to settlement statements, then compare a realistic downside scenario before changing prices.
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