A strategic financial and operational cheat sheet for online merchants, D2C brand founders, Amazon/Flipkart sellers, and SaaS executives covering marketplace take rates, payment gateways, unit economics, and GST input tax credit rules.
Essential reference equations governing calculations in this domain.
\text{ROAS} = \frac{\text{Gross Revenue Generated by Ads}}{\text{Total Advertising Cost}} \quad (\text{e.g. } 4.0 = 400\%)Measures campaign revenue efficiency. A 4x ROAS means ₹4 in revenue for every ₹1 spent on ads.
\text{LTV} = \frac{\text{Average Revenue Per User (ARPU)} \times \text{Gross Margin (\%)}}{\text{Monthly Churn Rate (\%)}}Estimates total gross profit generated by an average customer throughout their entire relationship with the company.
\text{Break-Even Units} = \frac{\text{Fixed Overhead Costs}}{\text{Selling Price per Unit} - \text{Variable Cost per Unit}}Number of product units required to be sold to cover fixed rent, salaries, and tool subscriptions.
\text{NRR} = \frac{\text{Starting ARR} + \text{Expansion} - \text{Contraction} - \text{Churn}}{\text{Starting ARR}} \times 100Gold-standard SaaS retention metric. Over 100% indicates organic account expansion without new customer acquisition.
Standard commission take-rates, closing fees, and platform take-rates.
| Platform | Referral Commission Range | Closing / Fixed Fee | Payment Processing | Fulfillment / Shipping Notes |
|---|---|---|---|---|
| Amazon India (Marketplace) | 3% to 22% (Category dependent) | ₹5 to ₹61 per item sold based on price slab | Included in referral fee | FBA (Fulfilled by Amazon) adds pick, pack & weight handling |
| Flipkart (India) | 4% to 20% (Category dependent) | ₹5 to ₹55 per item based on value | Included in referral fee | Flipkart Assured fulfillment fee based on volumetric weight |
| Shopify (Self-Hosted D2C) | 0% (Standard) or 0.5%–2% if external gateway | None (Monthly SaaS: $29 to $399) | Gateway dependent (1.9% to 2.9% + 30¢) | Merchant manages own 3PL contracts (Shiprocket, Delhivery) |
| Etsy (Handmade / Vintage) | 6.5% transaction fee | 20¢ listing fee per item (4-month renewal) | 3% + 25¢ payment processing | International currency conversion fee: 2.5% |
Domestic and international transaction processing take rates.
| Payment Gateway | Domestic Debit / UPI | Domestic Credit Card | International Cards | Settlement Cycle |
|---|---|---|---|---|
| Razorpay (India) | 0% (UPI) / 0.4%–0.9% (Debit) | 2.0% + 18% GST | 3.0% to 3.5% + currency markup | T+2 business days |
| Cashfree Payments | 0% (UPI) / 0.9% (RuPay) | 1.9% to 2.0% + 18% GST | 3.5% + ₹7 flat fee | T+1 or instant settlement options |
| Stripe (India) | 2.0% domestic cards | 2.0% standard domestic | 3.0% to 4.3% + ₹3 per transaction | T+3 to T+5 rolling basis |
| PayPal (Cross-Border) | N/A (Cross-border focus) | N/A | 4.4% + fixed fee based on currency | Daily auto-withdrawal to Indian bank |
Definitions, optimal health targets, and formula logic for business metrics.
| Metric | Acronym | Target Healthy Benchmark | Formula Summary | Strategic Importance |
|---|---|---|---|---|
| Customer Acquisition Cost | CAC | Payback < 12 months | Total Sales & Marketing Spend ÷ New Customers Acquired | Unit economic sustainability |
| Customer Lifetime Value | LTV | LTV : CAC ratio ≥ 3 : 1 | (ARPU × Gross Margin %) ÷ Churn % | Determines viable ad acquisition budget |
| Monthly Recurring Revenue | MRR | MoM Growth 10%–20% | Sum of all active normalized subscription fees | Primary predictability indicator for SaaS |
| Average Order Value | AOV | Category dependent (Push via bundles) | Total Gross Revenue ÷ Total Number of Orders | Directly impacts blended ad profitability |
| Customer Churn Rate | Churn | < 1% monthly for enterprise (< 5% SMB) | Lost Customers during period ÷ Total Start Customers | The "leaky bucket" retention indicator |
Goods and services where businesses CANNOT claim back GST paid.
| Category / Expense Item | ITC Eligibility Status | Statutory Exception where ITC is Allowed | CGST Act Section |
|---|---|---|---|
| Motor vehicles for personnel transport (≤13 passengers) | Blocked (No ITC allowed) | Allowed if used for commercial passenger transport or driving school | Section 17(5)(a) |
| Food, beverages, outdoor catering & club membership | Blocked (No ITC allowed) | Allowed if mandatory by statutory employer law or part of composite supply | Section 17(5)(b)(i) |
| Health insurance & life insurance for employees | Blocked (No ITC allowed) | Allowed ONLY if government statute legally mandates employer to provide it | Section 17(5)(b)(iii) |
| Goods lost, stolen, destroyed, written off, or given as gift/samples | Blocked (No ITC allowed) | None. ITC previously claimed must be reversed immediately in GSTR-3B | Section 17(5)(h) |
| Goods/services used for personal consumption | Blocked (No ITC allowed) | None. Exclusively business use allowed for input credit claims | Section 17(5)(g) |
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Clear technical and regulatory explanations regarding these parameters and formulas.