COD / RTO Profit Calculator

See what Cash-on-Delivery orders actually earn after RTO (Return To Origin) losses — the number most Indian sellers get wrong.

How it works

Enter your total orders and the share that come back as RTO.

Delivered orders earn revenue and carry their normal costs. RTO orders earn nothing but still cost reverse shipping, packaging and ad spend.

The result shows total net profit, total RTO loss, and profit per delivered order.

Formula & methodology

  • Delivered orders = Orders × (1 − RTO %)
  • RTO orders = Orders × RTO %
  • RTO loss = RTO orders × (RTO shipping + Packaging + Ad cost)
  • Net profit = (Delivered × (Price − delivered costs)) − RTO loss

Worked example

Example: 100 orders, ₹699 price, ₹280 cost, ₹70 shipping, 25% RTO, ₹120 RTO shipping, ₹40 ads.

  • Delivered = 100 × 75% = 75 orders
  • RTO = 25 orders
  • RTO loss = 25 × (₹120 + ₹15 + ₹40) = ₹4,375
  • Delivered profit ≈ 75 × (₹699 − ₹280 − ₹70 − ₹15 − ₹14 COD − ₹40 ads)
  • Net profit = delivered profit − RTO loss

Important assumptions

  • The product on an RTO order is assumed returned to you in sellable condition (not written off).
  • Ad spend is treated as lost on RTO orders because the acquisition cost is already paid.
  • COD collection fee is charged on delivered orders only.

Common mistakes

  • Calculating profit only on delivered orders and ignoring the money burned on RTO.
  • Assuming ad spend is recovered on returned orders — it isn't.
  • Forgetting reverse shipping is often charged on top of forward shipping.

Frequently asked questions

What is RTO?

RTO (Return To Origin) is a COD order that the customer refuses or that fails delivery, so the courier ships it back to you. You earn no revenue but pay logistics both ways.

What RTO rate is normal?

It varies widely by category, price and pincode mix — often 15–40% for COD fashion. Use your own data; we never invent a number for you.

How do I reduce RTO losses?

Lower COD RTO by confirming orders, restricting COD on risky pincodes, and improving product pages. This tool shows how much each point of RTO costs you.

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