I sell silver jewelry. The metal I buy costs 84% of what I charge the customer, and the customer can look up today’s silver rate on their phone, so I cannot mark it up. When I finally worked the whole thing through, my gross margin was 6.3% — and shipping and returns took two-thirds of that.
Where these numbers come from
This is my own shop, rupanjalibd.com, not a case study and not an average. I have separated what I know from what I calculated, because the difference matters and most margin articles never make it.
| What I know, from running the shop | Taka | USD |
|---|---|---|
| Silver I buy, per vori (11.664 g) | ৳3,800 | $30.99 |
| Silver I charge, per vori | ৳4,000 | $32.62 |
| Making charge paid to my karigor, per piece | ৳300 – ৳1,000 | $2.45 – $8.15 |
| Making charge billed to the customer | karigor’s rate + 10–30% | — |
| Packaging and courier, per order | ৳150 – ৳250 | $1.22 – $2.04 |
| Return charge when a parcel comes back | ৳120 | $0.98 |
| Share of parcels that come back | about 20% | — |
| Fixed costs a month — hosting, ads, phone, internet | ৳3,000 – ৳8,000 | $24.46 – $65.24 |
One piece, all the way through
Take a 1.5 vori piece — 17.5 grams — with a ৳650 making charge, marked up 20%. Everything from here is arithmetic on the table above, not a second set of claims.
| Metal charged to customer (1.5 × ৳4,000) | ৳6,000 | $48.93 |
| Metal I paid for (1.5 × ৳3,800) | − ৳5,700 | − $46.48 |
| Metal margin | ৳300 | $2.45 |
| Making charge billed (৳650 + 20%) | ৳780 | $6.36 |
| Making charge paid to karigor | − ৳650 | − $5.30 |
| Making margin | ৳130 | $1.06 |
| Sale price | ৳6,780 | $55.29 |
| Gross margin before shipping | ৳430 | $3.51 — 6.3% |
Look at where the margin actually is. Of ৳430, the metal contributes ৳300 and the making charge ৳130 — but the metal margin is fixed by a public rate I cannot move. All of my pricing freedom lives in a ৳130 line.
Then shipping and returns happen
About one parcel in five comes back to me. So the honest unit is not one order — it is ten parcels shipped, eight of which arrive.
| Gross on 8 delivered orders (8 × ৳430) | ৳3,440 | $28.05 |
| Packaging and courier on all 10 parcels (10 × ৳200) | − ৳2,000 | − $16.31 |
| Return charge on the 2 that came back (2 × ৳120) | − ৳240 | − $1.96 |
| Left over 8 delivered orders | ৳1,200 | $9.79 |
| Per delivered order | ৳150 | $1.22 — 2.2% |
6.3% became 2.2%. Fulfilment took ৳280 of a ৳430 margin: 65% of the profit, on the orders that went perfectly. Nothing went wrong in that table. That is what it looks like when everything works.
The two returned parcels cost ৳240, but that ৳240 is not charged to them — it is charged to the eight that arrived. Spread across delivered orders it is ৳30 each. It appears on no order screen and in no report, and it leaves with every single parcel I send.
And then the month has to pay for itself
৳150 net per delivered order. Fixed costs of ৳3,000 to ৳8,000 a month. That means 20 to 53 delivered orders before the shop earns a single taka.
Not 20 to 53 orders before it is profitable — 20 to 53 before it is at zero. This is the number that reframes everything, and it is the one almost nobody calculates, because it requires knowing your net per order rather than your gross.
What a US or UK handmade seller should take from this
My situation is extreme. Your materials are probably 20–35% of your price, not 84%, and your customer cannot look up what your beads cost. That is exactly why this is useful: every mistake is amplified until it is impossible to miss.
| What people usually call “margin” | What it actually leaves out |
|---|---|
| Price minus materials | Your labour, packaging, postage, platform fees, returns, fixed costs |
| Price minus materials and labour | Packaging, postage, platform fees, returns, fixed costs |
| Price minus everything on the order screen | Returns and fixed costs — the two that are invisible per order |
| Net per delivered order | Nothing. This is the number. |
On Etsy the fee layer replaces my courier layer and behaves almost identically — around 10.7% of an ordinary order in published fees, more if the sale comes through Offsite Ads. That arithmetic is in every Etsy fee in 2026, worked through on a $38 order. And the free-shipping decision, which is the single biggest lever in the table above, is in what free shipping actually costs you.
Three things to do with this
- Work out your own net per delivered order, once. Take a real order. Subtract materials, your labour, packaging, postage, platform fees — then subtract your return rate times what one return costs you, spread across every order. It takes twenty minutes and it will not be the number you expected.
- Divide your monthly fixed costs by that number. That is how many orders a month you need before you earn anything. Write it on something you can see. It changes which listing you photograph next.
- Attack the biggest line, not the easiest one. In my table, fulfilment is 65% of gross margin and my metal margin is fixed — so raising prices by 5% would do less for me than cutting my return rate from 20% to 10%. Find the equivalent line in yours before you touch your prices.
All shop figures are my own, given from my records on 4 September 2026. Currency converted at 122.63 BDT to the dollar, the rate on 3 September 2026 — check the current rate before reusing these numbers.
Questions people ask about this
What profit margin should a handmade jewelry shop have?
The usual advice is 50% gross, and for a maker buying beads and wire that is reachable. What matters far more than the target is which margin you are measuring. My gross was 6.3% and my net per delivered order was 2.2% — the gap between those two numbers is where most handmade shops quietly lose money.
Why is your margin so much lower than the 50% people quote?
Because my main material is a commodity with a public price. Silver is 84% of my selling price and the customer knows today’s rate, so the metal cannot be marked up. A seller whose materials are 25% of the price has four times the room I do.
Should returns really be counted on orders that were delivered fine?
Yes, and this is the line people argue with. If one parcel in five comes back, the cost of those returns has to be paid out of the ones that arrive — there is nowhere else for it to come from. Counting it only on returned orders makes every successful order look ৳30 more profitable than it is.
How do I find my break-even order count?
Monthly fixed costs divided by net profit per delivered order. Fixed costs are the ones that arrive whether you sell anything or not: hosting, subscriptions, phone, internet, ads you leave running. Mine give a break-even of 20 to 53 orders a month.
Is a 2% net margin a business worth running?
Not at that volume, and I am not going to pretend otherwise. It is a business with one obvious lever — the return rate — and a clear ceiling on another. Knowing that is worth more than a comfortable number, because it tells you exactly what to fix first.
Leave a Reply