Returns Rate Profit Killer
The "Silent Killer" of e-commerce. How much are returns actually costing you?
How This Tool Works
This calculator analyzes the Financial Erosion of Returns. Most sellers only look at refund amounts, but this tool accounts for the "Triple Whammy" cost of a return.
- Refund Cost: The revenue you must return to the customer.
- Sunk Costs: Non-refundable FBA fees and original PPC advertising spend.
- Inventory Loss: The cost of goods (COGS) lost if the returned item is unsellable.
How to Use (Steps)
- Unit Economics: Enter your selling price, landed cost, and FBA fees.
- Return Rate: Slide to your current average return percentage.
- Sellable Status: Uncheck if your items are usually opened or damaged upon return.
- Analyze: Compare your 'Ideal Profit' vs. 'Real Profit' per 100 orders.
Example Calculation
Scenario: 10% Return Rate (Unsellable).
• Ideal Profit (0% Returns): $1,000.
• 10 Non-Sellable Returns: -$120 (COGS) + -$85 (Fees).
• Real Profit: $795.
• Impact: A 10% return rate reduced your profit by 20.5%.
Why This Tool Is Accurate
We use the "Per 100 Units" baseline to provide a statistically significant look at your business health. It accurately model's Amazon's policy of retaining a portion of the referral fee and the entirety of the fulfillment fee on returned orders.
Limitations & Disclaimer
Return rates can vary wildly following holiday seasons. This tool does not account for 'Removal Order' shipping costs. Disclaimer: Returns are a cost of doing business; use this data to optimize product quality.
Frequently Asked Questions
No. Amazon keeps the original Pick & Pack fee. They also charge a "Returns Processing Fee" in certain categories like Apparel and Shoes.
A standard return rate is 5-10% for most categories. However, high-fashion or complex electronics can see rates as high as 15-20%.
Reduce returns by using high-quality 360-degree images, accurate size charts, and clear instruction manuals to manage customer expectations.