Start with your true cost per order
Your real cost includes purchase price, packaging, freight, and any per-order operations cost.
List every cost you can control. Missing even a small charge compounds as volumes grow.
- Purchase or manufacturing cost
- Packing and handling
- Freight or inbound logistics
- Operational costs like labeling or QC
Model returns and RTO leakage
Returns reduce profit because you lose shipping fees and time. Even a small return rate can drag margins.
Estimate your average loss per return and multiply it by the return rate for a realistic leakage cost.
- Return rate (%)
- Average loss per return
- Damage or RTO handling cost
Add a profit target before GST
Decide how much profit you want per order. Add it to your total cost plus return leakage.
This becomes your target subtotal before taxes are applied.
Apply GST with confidence
Once you have a subtotal, apply GST based on your category requirements.
GST should be applied after you account for costs and profit, not before.
Next step
Apply this guide using our calculator tools.