The Real Cost of Running an E-commerce Business in Algeria (Detailed Breakdown)
July 21, 2026
When I started e-commerce, I thought the costs were simple: product cost + delivery x margin = profit. I was wrong by about 40%.
Here’s the real monthly breakdown of running an e-commerce business in Algeria, processing about 100 orders per month.
The Real Monthly Costs
| Item | Monthly Cost (DZD) | % of Revenue |
|---|---|---|
| Product cost (wholesale) | 150,000 | 40% |
| Delivery costs | 50,000 | 13% |
| Returns/rejections (10%) | 18,000 | 5% |
| Packaging | 12,000 | 3% |
| Advertising (Meta ads) | 30,000 | 8% |
| Team (1 person part-time) | 25,000 | 7% |
| Phone/internet/WhatsApp | 5,000 | 1.3% |
| Tools/hosting | 3,000 | 0.8% |
| Miscellaneous | 5,000 | 1.3% |
| Total costs | 298,000 | 79% |
| Revenue (100 orders x avg 3,750 DZD) | 375,000 | 100% |
| Net profit | 77,000 | 21% |
The numbers that surprised me:
- Delivery (13%). This varied wildly by destination. Some orders cost 5% of revenue in delivery, others cost 25%.
- Returns/rejections (5%). Every rejected order costs twice: outbound + return shipping. This is a tax on COD that I didn’t account for initially.
- Advertising (8%). Meta ads work, but the costs have been rising. Without ads, orders drop 60%.
- Team (7%). One part-time person handling packing and WhatsApp saves me 3 hours/day. The cost is worth it.
Breakeven: How Many Orders You Need
Based on my numbers:
At 30 orders/month: You’re probably not profitable. Fixed costs (advertising $50, tools, phone) eat the margin. The team member isn’t justified yet.
At 60 orders/month: You’re marginally profitable. 8-12% net margin. You’re doing most of the work yourself.
At 100 orders/month: You hit the sweet spot. The team member earns their keep. Advertising scales efficiently. 18-22% net margin.
At 200+ orders/month: You need systems. Spreadsheets won’t cut it. The margin improves if you automate, but operational complexity grows fast.
Hidden Costs That Add Up
1. COD rejection. 10% of orders get rejected. You pay double shipping and the product sits. This alone costs 4-5% of revenue.
2. Bank delays. When using CCP or bank transfers, money takes 3-7 days to arrive. That’s 3-7 days of cash flow gap.
3. WhatsApp time. Answering “where is my order?” messages takes 30 min/day minimum. That’s real time that doesn’t generate revenue.
4. Marketing inefficiency. Meta ads in Algeria cost more than in Egypt or Tunisia because the audience is smaller and more expensive to reach.
How I Reduced Costs
- Delivery cost: Switched from flat-rate to destination-based pricing. Cut delivery cost from 17% to 13% of revenue.
- Returns: Implemented pre-confirmation calls. Cut rejection rate from 12% to 5%.
- WhatsApp time: Added order status tracking that customers can check themselves. Cut status inquiries by 60%.
How You Can Do It Too
- Track everything. Not just product cost + selling price. Track delivery, returns, ads, and your time. The numbers will surprise you.
- Reduce returns first. Pre-confirmation calls cost 2 minutes and cut returns by 50%.
- Price by destination. Flat-rate delivery loses money on distant orders and overcharges nearby ones.
- Automate when you hit 50+ orders/month. The time savings pay for the automation.
FAQs
Q: Is e-commerce profitable in Algeria?
A: Yes, at 18-22% net margin if you track costs carefully. Most businesses operate at 10-15% because they don’t track hidden costs.
Q: What’s the biggest expense nobody talks about?
A: COD rejections. The double shipping + lost opportunity adds up fast.
Q: How much capital do I need to start?
A: For 100 orders/month, you need 200,000-300,000 DZD in working capital (product inventory + shipping + ads before revenue comes back).
Q: Is it worth hiring a team?
A: At 100+ orders/month, yes. One part-time person handling operations frees you to focus on growth and product.
Related: Delivery Costs Are Eating Your Margins – the delivery cost breakdown. COD Killing Margins – reducing COD losses. E-commerce Profit Calculator – calculating true per-order profitability.