Guide to pricing your products
by Dufa Staff | 24 August 2020
This is a guide to help you price your products on Dufa, so you can run a successful business.
Cost Price:
Make sure you have the actual cost price of the product you are creating in terms of the Material Cost, any fees you paid while procuring raw material, wages paid to get the product ready and any other services that will be counted towards the cost price of the product.
Fee components:
You need to understand all the fee components before you begin to price your product.
- Transaction Fee: Dufa has partnered with Razorpay for processing payments. Razorpay charges a fee of 2% for domestic transactions and 3% for international transactions + the applicable GST. Hence ensure you add an approximate 3% to your cost price.
- Subscription Fee: Dufa has 2 subscription plans to choose from.
- Dabbler: Fee of Rs. 500 per month for 50 products. If you are uploading 50 products, the fee incurred per product is about Rs. 10.
- Professional Fee: Fee of Rs. 1500 per month for unlimited products or Rs. 15000 annually. If you are uploading 100 products, the fee incurred per product is about Rs. 15.
- Use the appropriate amount per your plan and number of products uploaded to add to your cost.
- Commission Fee: Dufa charges a commission fee based on the subscription you are enrolled in.
- For the Dabbler subscription: The commission is 15%
- For the Professional subscription: The commission is 20%
- Add the appropriate % accordingly to your calculations.
- Shipping Fee: Dufa gives you the option to add offer Free shipping or Charged shipping. If you are offering Free shipping, make sure you add the approximate fee to your cost. You wouldn’t know the actual shipping cost as it depends on where you’ll ship the product but based on your product weight you can assign a ballpark value.
Goods and Services Tax (GST):
You need to pay the Goods and services tax as applicable for your product as you need to pay this component. You can of course claim the GST % as input credit for the fees that Dufa charges you.
Profit Margin:
Ensure you decide what you want to set your profit margin as after taking into consideration all the fees you must pay. Apply the profit % and get the final listing price.
Invoice:
Your invoice will display the listing price as well as all the deductions and the GST component will be shown per the HSN code you enter for your product.
Example:
Assume you are selling a shirt and the material, design and labor cost is Rs. 1000.
Subscription: Dabbler, Free Shipping
Approx. Transaction Fee: 3% = Rs. 30
Approx. Subscription Fee component: Rs. 10 (i.e. Rs. 500/50 products = 10)
Approx. Commission Fee.: 15% = Rs. 150
Approx. Shipping Fee: Rs. 60 (per the weight)
Fees + Cost: 1000+ 30 + 10 + 150 + 60 = Rs. 1250
Profit Margin: 20% = 20 * 1250 /100 = Rs. 250
Cost without GST = 1250 + 250 = Rs. 1500
GST: 12% = 12 * 1500 /100 = Rs. 180 (to be paid as GST)
Approx. Listing Price: 1500 + 180 = Rs. 1680 (Add a padding of Rs. 40 – 50 to align the arrears on reverse calculation so that you still make a profit of 20%) = Rs. 1720
Note: GST charged by Dufa on fees can be claimed as input credit hence not considered in calculation.
Related Articles:
Guide to subscription & enrollment
Guide to fee structure per order