Unit Economics for D2C Founders: Calculating Real Net Margin
Stop confusing GMV with profit. A breakdown of Cost of Goods Sold (COGS), shipping charges, packaging, payment gateway fees, and ad CAC.
Key Executive Takeaways
- 1The 3x Markup Rule for handmade and artisanal products
- 2Accounting for courier volumetric weight surprises
- 3Setting a minimum order value (MOV) for free shipping
Founder Action Checklist
Tap steps as you complete them in your store setup.
1. The Anatomy of an Indian D2C Price Tag
If you sell a handcrafted product for ₹999, here is where the money typically goes: • Product Manufacturing / COGS: ₹250 (25%) • Custom Packaging & Thank You Card: ₹40 (4%) • Forward Courier Delivery (0.5kg): ₹70 (7%) • Payment Gateway (Razorpay ~2%): ₹20 (2%) • RTO & Damage Reserve (5%): ₹50 (5%) • Meta / Instagram Ad Spend (CAC): ₹300 (30%) • Net Founder Profit: ₹269 (27%)
2. The Danger of Volumetric Weight
Indian couriers charge based on whichever is higher: actual physical weight or volumetric weight (Length × Width × Height in cm / 5000). A lightweight 200g cushion packed in a large 30×30×15 cm box is billed as 2.7 kg! Always compress textiles and choose snug boxes.
3. Increasing Average Order Value (AOV) with Bundles
Shipping a 2-item cart costs almost the exact same courier fee as shipping a 1-item cart. Use volume discount vouchers (e.g. 'Buy 2 get 10% off') to push cart values above ₹1,000.
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