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Ecommerce Returns Profit Calculator
Calculate ecommerce profit per original order after product returns, full refunds, return shipping, inventory recovery and platform fee refunds.
How the calculation works
Expected profit = (1 − return rate) × kept-order profit + return rate × returned-order profit. A return refunds the full selling price but retains outbound, advertising and other costs. Product-cost recovery and refunded platform fees reduce the return loss.
Worked example
A $50 sale, $20 product cost, $3 shipping, $2 advertising and a 10% fee earns $20 if kept. With $6 extra return cost, full product-cost recovery and a full fee refund, a return loses $11. At a 20% return rate, expected profit per original order is $13.80; break-even return rate is about 64.52%.
Assumptions and limits
Full refunds and one product per original order. No exchanges, partial refunds, resale delays, taxes or fixed overhead are modeled.
Recovered product cost is an inventory-value assumption, not cash received. Expected profit is not the available cash balance. Recoverable returned stock may still take time to sell.
The profit margin uses retained sales revenue after refunds. If every order is returned, retained revenue is zero and the margin is undefined.
Your numbers are processed in this browser. Changing currency does not convert them. These are estimates from your assumptions; check actual costs and settlement statements.
Frequently asked questions
Is expected profit per sale or per kept order?
It is per original order, averaging the profit on kept orders and the loss on returned orders. A 20% return rate means 20 out of every 100 original orders are modeled as fully refunded.
Does recovered product cost mean cash comes back?
No. Recovery represents reusable inventory value. A returned product may be saleable again, but the value is not cash received and a later sale is not simulated. Use zero recovery for a product with no usable value.
Should I include outbound shipping and refunded platform fees?
Outbound shipping remains a cost on returned orders in this model. Extra return cost is added separately. Enter the share of the original platform fee actually refunded; a fee that is not refunded remains part of the return loss.
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