How to calculate reseller profit in Pakistan (real examples)

The formula

Profit per delivered order = retail price + delivery charged to the customer − wholesale cost − courier fee − COD collection fee − platform commission − RTO cost share. Every line matters; removing one is how resellers talk themselves into products that lose money.

The examples below use typical Pakistan ranges: a flat courier fee of Rs 200–300, a COD fee around 1–2% of the collected amount, and the platform commission at its default 5% of retail. Your own courier agreement and category will move these numbers — that is the point of doing the math per product.

Worked example 1 — a Rs 1,800 lawn suit

• Retail price: Rs 1,800
• Wholesale cost: −Rs 1,100
• Courier fee: −Rs 250
• COD fee (1.5% of 1,800): −Rs 27
• Commission (5% of retail): −Rs 90
• Net per delivered order: Rs 333 — about 18.5% of the retail price.

The Rs 700 gap between wholesale and retail became Rs 333. Still a workable product — but only just under half of what the naive math promised.

Worked example 2 — a Rs 950 kitchen item

• Retail price: Rs 950
• Wholesale cost: −Rs 500
• Courier fee: −Rs 250
• COD fee (1.5%): −Rs 14
• Commission (5%): −Rs 48
• Net per delivered order: Rs 138 — about 14.5% of retail.

A Rs 450 markup shrank to Rs 138 because the courier fee is flat — it eats the same Rs 250 whether the parcel contains a Rs 950 item or a Rs 9,500 one. Low ticket prices and flat courier fees are enemies. Worse, one refused parcel (typically a −Rs 250 courier loss) wipes out the profit of nearly two delivered orders.

Worked example 3 — a Rs 4,500 electronics accessory

• Retail price: Rs 4,500
• Wholesale cost: −Rs 3,200
• Courier fee (heavier/insured): −Rs 300
• COD fee (1.5%): −Rs 68
• Commission (5%): −Rs 225
• Net per delivered order: Rs 707 — about 15.7% of retail.

Higher tickets produce bigger rupee margins, but notice that the COD fee and commission scale with price — percentage costs never sleep. High-ticket items also tend to carry higher refusal risk in COD markets, which is where the next section matters.

Markup is not margin

Markup is profit divided by cost; margin is profit divided by selling price. On the lawn suit, buying at 1,100 and selling at 1,800 is a 64% markup — which sounds like a 64% business. It is not. The gross margin on that price is 39%, and after courier, COD fee and commission the net margin is 18.5%. Resellers who think in markup consistently overestimate what they keep; run dropshipping pricing decisions on net margin, never on the wholesale-to-retail gap.

The RTO drag

Refused parcels are the silent tax of COD selling. At a 15% RTO rate, out of every 100 orders roughly 85 deliver and 15 come back — each refusal typically costing you the forward courier fee with zero revenue. Expected value per order placed on the lawn suit: 0.85 × Rs 333 − 0.15 × Rs 250 ≈ Rs 246. Your real per-order economics dropped 26% without a single number on the listing changing.

Now run the same drag on the kitchen item: 0.85 × Rs 138 − 0.15 × Rs 250 ≈ Rs 80 per order placed. Push RTO to 25% and it falls to roughly Rs 41 — a product that technically profits on every delivery still earns almost nothing as a business. This is why a common rule of thumb is to aim for at least Rs 300–500 net per delivered order on low tickets: below that, ordinary refusal rates can erase weeks of work.

When charging delivery helps — and when it hurts

Charging the customer Rs 200–250 for delivery moves the courier fee off your books: the lawn suit's net jumps from Rs 333 to roughly Rs 533 per delivered order. It also tends to filter out casual orders — customers who agree to pay delivery are usually more committed, which can lower RTO. The trade-off is conversion: free delivery typically lifts order volume in Pakistan, and a delivery charge at checkout will lose you some buyers entirely.

There is no universal right answer — test it per category. What matters is that you price the decision with the formula above instead of copying whatever a competitor's page says. "Free delivery" that pushes you below Rs 100 net per order is not generosity; it is a slow loss.

Typical costs at a glance

Common questions

• Is the wholesale-to-retail gap my profit? No. Subtract courier, COD fee, commission and an RTO share first. The leftover — often a third to half of the gap — is your real profit.
• What is a healthy net margin per order? A common rule of thumb is Rs 300–500 net per delivered order on low-ticket items, so a few refusals cannot erase the week. Higher tickets should clear more in absolute rupees.
• Do I pay commission on returned or refused orders? On SYEZPOS, marketplace commission is invoiced monthly and credited back automatically on returned orders — you do not pay for parcels that came back.
• Should I offer free delivery? It typically lifts conversions but costs you Rs 200–300 per order. Run both versions through the formula — if free delivery drops you under ~Rs 100 net, the math usually favors charging.
• Does this formula work for prepaid orders? Yes — set the COD fee to zero for JazzCash, EasyPaisa or bank-transfer orders. Everything else stays the same.

Next step

Put your own numbers in — wholesale price, your retail price, your courier's rate and a realistic RTO rate — on the free dropshipping profit calculator. Then set your markup with real margins in mind using the dropshipping pricing guide before you publish the product.