A product that costs ₹320 and sells on Amazon for ₹799 looks like a 60% margin — until commission, closing fee, shipping by volumetric weight, payment collection, GST on all those fees, returns and packaging take their turn. Marketplace sellers routinely discover they are losing money on their best-selling SKU. This workflow chains the steps in the right order: product cost → packaging → parcel dimensions and chargeable weight → shipping → platform commission and fees → GST → target margin → listing price, and shows the net you actually receive per order.
The fee stack, in order
| Step | What it is |
|---|---|
| Product cost | Purchase or manufacturing cost, net of creditable GST |
| Packaging | Box, filler, tape, label — often ₹15–40 |
| Chargeable weight | Higher of actual weight and volumetric (L×W×H ÷ 5000 for most Indian couriers) |
| Shipping | Per 500 g slab, by zone (local/regional/national); marketplace-fulfilled rates differ from self-ship |
| Referral / commission | 2–20% by category on Amazon and Flipkart; Meesho charges near-zero commission but has its own logistics rates |
| Closing / fixed fee | ₹5–65 per unit by price band and fulfilment type |
| Payment collection fee | About 2% on Flipkart; included in referral on Amazon; COD charges extra |
| GST on fees | 18% on every fee line (claimable as ITC if registered) |
| Returns provision | Typical return rates 5–30% by category; reverse shipping is charged to you |
| Advertising | Optional, but often 5–10% of sales for visibility |
The complete comparison of Amazon, Flipkart and Meesho fees, with examples, is in Pricing for Amazon, Flipkart and Meesho.
How to use the workflow
- Enter product cost and packaging.
- Enter parcel dimensions and actual weight; the tool computes volumetric weight (choose the courier divisor) and chargeable weight.
- Enter the shipping rate per 500 g and the number of slabs; add COD or remote-area surcharges if relevant.
- Enter the platform commission %, fixed/closing fee, payment fee %, and expected return rate.
- Set your target net margin; read the listing price needed, the fee breakdown, and net receipt per unit. Or enter a listing price to see the margin it leaves.
Worked example
Cost ₹320 + packaging ₹25; parcel 25 × 18 × 10 cm at 0.6 kg → volumetric 0.9 kg, chargeable 1 kg = 2 slabs × ₹45 = ₹90. At a ₹799 listing: commission 12% (₹96), closing fee ₹20, payment 2% (₹16), GST on fees 18% (₹40), returns at 8% costing ₹30 average → total deductions ≈ ₹292. Net receipt ≈ ₹507, less product and packaging ₹345 → ₹162 contribution, 20% of price. Trim the box to 22 × 16 × 8 cm and chargeable weight drops to 0.6 kg (1 slab): +₹45 per order.
Levers that move the number
- Box size — the most under-used lever; see the volumetric weight calculator.
- Price banding: closing fees step up at ₹300, ₹500 and ₹1,000 on some platforms; a ₹499 listing can net more than ₹520.
- Category commission: the same product may fit two categories with different referral rates.
- Returns: better photos and size charts cut returns more than any fee negotiation; clean images with the background remover and photo resizer.
- Own channel: a WhatsApp order via the WhatsApp direct link with a UPI QR has no commission at all; ONDC sits in between — see Selling on ONDC in 2026.
GST reminders for sellers
Marketplace sellers must be GST-registered regardless of turnover. Platforms deduct 0.5% TCS (reduced from 1%) on net sales, visible in GSTR-2A and claimable. Fees carry 18% GST as ITC. Your GST invoices for own-channel sales and the marketplace's invoices together make up GSTR-1.
Related tools
- Volumetric weight calculator — chargeable weight by courier divisor.
- Profit margin & break-even — margins across all channels.
- Contribution margin — per-order contribution and break-even.
- Shipping label generator — 4×6 labels for self-ship orders.
- Barcode generator — EAN/GS1 codes for listings.
Importing your stock? Payment timelines now follow your contract rather than a flat six months: The other half of FEMA 2026.