Much less than it looks. A product selling for QAR 150 with a QAR 60 supplier cost seems to make QAR 90 — but after packaging, delivery, payment fees, advertising and returns, the real contribution can be closer to QAR 36. Always calculate margin per order after all these costs.
Imagine you sell a product for QAR 150. Your supplier cost may be QAR 60. It might look like you are making QAR 90. But then consider the other costs of each order:
| Item | Amount (QAR) |
|---|---|
| Selling price | 150 |
| Product cost | −60 |
| Packaging | −5 |
| Delivery | −15 |
| Payment costs | −4 |
| Advertising (customer acquisition) | −25 |
| Returns / damages | −5 |
| Real contribution | 36 |
What looked like QAR 90 per order is closer to QAR 36 — before rent, salaries, software or your own time.
The Formula to Use
Selling Price – Product Cost – Delivery – Payment Fees – Packaging – Advertising – Returns = Real Contribution
An e-commerce business can have high sales but still produce weak profits if the economics are not calculated properly.
How to Improve Your Margin
- Raise average order value with bundles or minimum orders for free delivery
- Reduce acquisition cost by building organic and repeat-customer channels
- Negotiate delivery rates as volume grows
- Cut returns with accurate product descriptions and photos
Planning an e-commerce business in Qatar? Get the right licence and structure from day one.
Talk to Our AdvisorsWritten by Syed Muhammad Shabbar Ali Naqvi · Tejwaans Corporate Group