6 min read
Mohammed Al-Anazi
Product Manager at Salla
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Selling digital cards can be profitable, but total sales do not tell you how much you actually keep. Start with the cost of the card, payment processing and fulfilment fees, marketing, and expected refunds, then compare what remains against your store's fixed overheads. If the margin is thin, sales might increase while profit stays negligible.
Cardny's story mentioned sales exceeding SAR 330,000 over four months, while reported monthly profit stood at SAR 2,500 at one stage, reaching 4,000 in some months. These were the results for that specific store during that period and cannot be used to predict your outcome. Their value lies in reminding us to separate revenue from profit.
What is the difference between sales, margin, and net profit?
Sales represent the total amounts paid by customers. Contribution margin per order is the selling price minus the variable costs associated with that order. Net profit for the period is the total remaining from all orders, minus fixed overheads and any other expenses applicable to your business. Fees and taxes must be assessed according to your specific situation, so never simply copy a general figure from an example.
Let us calculate a clear hypothetical example: a card sold for SAR 100. The supply cost is 92, payment processing and fulfilment fees are 2, marketing attributed to the order is 3, and the allowance for failed/disputed orders is SAR 1. That leaves SAR 2 before fixed overheads and any other obligations. If you offer a SAR 3 discount without changing costs, the remaining amount drops to negative SAR 1.
Item in the hypothetical example | SAR |
|---|---|
Selling price | 100 |
Card cost | 92 |
Payment & fulfilment fees | 2 |
Marketing attributed to order | 3 |
Variable dispute allowance | 1 |
Remaining balance before fixed overheads | 2 |
Do not arbitrarily set a dispute allowance and treat it as a real fee; replace it with actual data from your sales. Early on, record actual refunds and compensation to know whether they are rare or significantly impacting your margin.
How do you set a card's price before listing it?
Start with the supplier's price, region details, and denomination. Add the fees for each order and customer acquisition cost. Determine the remaining margin that makes the product viable for you, then check whether the final price is sensible for your target customer. If both conditions are not met, do not attempt to fix the equation with the promise of "high volume"; reassess the supplier, marketing channel, or the card itself.
In the guide to adding a digital card on Salla, there are selling price and cost price fields that help track the product. However, store records do not inherently track your advertising spend or customer support time unless you log them and link them to your orders. Keep a simple, separate ledger for these items.
Is Return on Ad Spend (ROAS) enough?
If you spend SAR 200 on a campaign and generate SAR 800 in sales, your ROAS is 4x. This is not a SAR 600 profit; the cost of the cards, payment processing, and disputed orders must also be deducted. For low-margin cards, marketing metrics can look attractive while the final bottom line remains weak. Evaluate each channel by the net contribution per order, not by sales alone.
When does a small discount turn into a loss-making order?
In the previous example, SAR 2 remained from a SAR 100 card after variable costs. If you drop the price to SAR 98, the order contribution becomes zero before fixed overheads; if the price is SAR 97, you lose SAR 1 on every order under those assumptions. Ten orders at this price do not fix the equation—they merely multiply the loss tenfold. Ad costs or supplier rates may shift with scale, but never factor in an effect you have not agreed upon or measured.
Create a table with three potential price points for the same card: the standard price, a limited discount, and a bundle offer if supplier terms permit. Deduct the cost of goods sold, payment processing, marketing, and dispute allowances for each scenario, then choose the minimum threshold at which you can serve customers sustainably. If the market will not bear a price that makes the order viable for you, shelve this card temporarily and look for a different product or supplier channel; do not inflate sales volume hoping it will mask a loss on individual orders.
Even if you enter the "cost price" in Salla, maintain a sheet for costs that do not appear in that field, such as ad spend per acquisition and actual refunds paid. This sheet is what makes your pricing strategy reviewable after your first sales.
A quick calculation worksheet to try now
Pick one card and note down: Selling price ____, Supplier cost ____, Payment & fulfilment fees ____, Marketing cost per completed order ____, Documented variable losses or refunds ____. Result = ____. Next, write down your monthly store fixed overheads ____, and calculate how many orders with a similar margin you need to break even assuming conditions remain identical. Do not turn this figure into a sales forecast.
If you offer multiple card denominations, repeat the calculation for each one. A lower-priced product might see higher demand but consume more support time, and supplier pricing can change. Review the formula whenever any figure shifts. For the initial capital needed before launching, refer to the startup cost article in this series.
Once you know your contribution margin per order, set up your product and store on Salla and test real sales rather than relying on theoretical margins.
A prompt to validate your numbers
Before finalizing your price
☐ Verified the card value, region restrictions, and supplier cost.
☐ Factored in actual per-order fees rather than an unverified estimate.
☐ Calculated channel costs against completed orders, not just clicks.
☐ Tested the impact of a discount or supplier price hike before launching ads.
☐ Deducted fixed overheads when evaluating the monthly outcome.
Frequently Asked Questions
What is the profit margin on digital cards?
There is no single percentage that applies to every card and supplier. Calculate your contribution per order based on actual figures, then compare it to your overheads. Another merchant's story does not determine your margin.
Should I raise the price if the margin is too thin?
It could be an option, but test whether your offer remains compelling to the customer with clear product details and support. It may be wiser to adjust the supplier, marketing channel, or product offering instead. Do not raise the price before understanding why the margin is weak.
Does offering a discount increase profit?
A discount reduces the margin per order unless it drives a measurable increase in order volume or lowers costs. Calculate its impact first, then test it on a limited scale and track the results.
Once the figures make sense, launch your digital card store on Salla. To get started immediately, open your account directly.
Mohammed Al-Anazi
Product Manager at Salla
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