Pricing & Margins
Part of POD product pricing
Calculating margin after printing and delivery
Calculate a POD order’s contribution margin after product, print, delivery and selling costs with a hypothetical worked example.
Calculate a POD order's margin by subtracting product, printing, supplier delivery and other variable costs from retained customer revenue. Divide the remaining contribution by that revenue. Put the customer's delivery fee on the revenue side and the supplier's delivery charge on the cost side; the amounts may differ.
Calculate one complete order
Choose the product, variant, sales channel and Australian delivery destination. Record the customer's item and delivery payment after discounts. Then record every charge the order causes.
In a connected-store arrangement, track the customer payment and supplier charge separately.
Order contribution = retained customer revenue − product and print cost − supplier delivery − selling fees − other variable order costs.
Contribution margin = order contribution ÷ retained customer revenue × 100.
Use amounts on a consistent GST basis and confirm the treatment that applies to your business.
The calculation needs positive retained revenue; a fully refunded order should be analysed as a remedy case instead.
Contribution covers costs beyond the order and, eventually, profit; it is not net profit.
| Worksheet line | What to enter |
|---|---|
| Retained customer revenue | Item price plus customer delivery charge, less discounts, on the chosen tax basis |
| Product and print | Charge for the exact variant and print positions |
| Supplier delivery | Charge for the actual basket and destination |
| Selling fees | Applicable marketplace, store and payment charges |
| Other variable costs | A supported problem allowance and other costs caused by the order |
Check the arithmetic
In a hypothetical order, the customer pays A$49. Product and printing cost A$20, supplier delivery A$8, selling fees A$2 and an order-problem allowance A$1.
Contribution is A$49 − A$20 − A$8 − A$2 − A$1 = A$18. The contribution margin is A$18 ÷ A$49 = 36.7%, rounded to one decimal place.
These are teaching figures, not a supplier quote or measured result. GST is omitted from the illustration; a real calculation needs the applicable tax treatment.
If the customer paid A$7 for delivery and the supplier charged A$8, the A$1 difference is already included when both figures appear on their respective sides of the worksheet. Do not deduct supplier delivery twice.
Check where the margin changes
Recalculate for a higher-cost size, a discount and a different destination. For a mixed basket, check the supplier delivery charge for the exact product combination and destination.
Compare the estimate with the supplier invoice and selling fees after an order. Keep advertising and shared overhead separate unless you can allocate them to an order on a sound basis. The comparison shows whether actual orders leave the contribution you expected.
