Documentation

How to use the Calculator

The Product Price Calculator helps you determine the profitability of your e-commerce products by factoring in various costs like sourcing, shipping, advertising, and taxes.

Total Orders: The number of orders you expect or have received.
Product Sourcing Cost: The cost to manufacture or buy a single unit of your product.
Selling Price: The price at which you are selling the product to customers.
Ad Cost: The estimated advertising cost per order (CPA).
Packaging Cost: The cost of packaging material per order.

Calculation Logic

1. Operating Metrics

Cancelled Orders = Total Orders × (Cancelled % / 100)
Shipped Orders = Total Orders - Cancelled Orders
RTO Orders = Shipped Orders × (RTO % / 100)
Delivered Orders = Shipped Orders - RTO Orders

2. Financials

Revenue = Total Orders × Selling Price
Delivered Revenue = Delivered Orders × Selling Price
Total Expense = Sum of all costs (Freight, Product, Ad, Packaging)

3. GST Calculation

We calculate GST components by treating input costs as Gross (inclusive of GST) to determine the tax credit.

GST Output = Delivered Revenue - (Delivered Revenue / (1 + Product GST%))
GST Input (Product) = Product Cost - (Product Cost / (1 + Product GST%))
GST Input (Services) = Service Costs - (Service Costs / (1 + Service GST%))
Net Payable GST = GST Output - (GST Input Product + GST Input Services)

4. Profitability

If Include Credit is OFF:
Net Profit = Delivered Revenue - Total Expense - MAX(0, Net Payable GST)
If Include Credit is ON:
Net Profit = Delivered Revenue - Total Expense - Net Payable GST
(Negative Payable GST is added as profit)
ROI = (Net Profit / Total Expense) × 100

Investo Calculator Logic

The Investo Calculator uses a simplified financial model focusing on EBITDA and PAT to verify true profitability.

Profitability Formulas

Gross Profit = Delivered Revenue - COGS
Where COGS = Product Cost + Packaging Cost
EBITDA = Gross Profit - Operating Expenses
Where Operating Expenses = Freight + Ads + RTO Charges + Return Handling
Tax Amount = EBITDA × (Tax Rate / 100)
Calculated only on positive EBITDA
PAT (Profit After Tax) = EBITDA - Tax Amount
This is your final take-home profit