COD Profit Calculator: How RTO Changes Your Profit

COD orders that are refused or not picked up come back to you as RTO (return to origin). Enter your numbers to see the real profit across a batch of orders and the RTO rate at which you stop making money.

FreeNo sign-upRuns in your browserUpdated 2 Nov 2026
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Your resultLive

Estimates only. Check important results before you rely on them.

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How to use this calculator

  1. Enter how many orders you placed and the RTO rate.
  2. Enter the selling price, product cost, shipping and COD fee.
  3. Add the return shipping per RTO and your cost to get each order.
  4. Read the total profit and the break-even RTO rate.

The formula

Profit per delivered order = Price − Cost − Shipping − COD fee − Packaging. Loss per RTO = Forward shipping + Return shipping. Total profit = Delivered × Profit per delivered − RTO × Loss per RTO − Orders × Ad cost. Break-even RTO = (Profit per delivered − Ad cost) ÷ (Profit per delivered + Loss per RTO).

Worked example

Out of 100 orders at 25% RTO, 75 are delivered at about ₹398 profit each (₹29,852) and 25 return at a ₹120 loss each (₹3,000). After ₹6,000 of ad cost, the total profit is about ₹20,852, or ₹209 per order. The break-even RTO rate is 65.3%.

Understanding your result

RTO is the hidden cost of COD. Each extra RTO point wipes out more than one delivered order's profit. Calling to confirm orders or offering a prepaid discount can lower it.

When to use it

  • Decide whether to offer cash on delivery.
  • See how much a prepaid discount is worth.
  • Find the safe limit for returns.

Assumptions and limits

Assumes returned products go back to stock undamaged. Damaged returns need to be included in the RTO loss. Marketplace fees, GST rules and tax rates change and differ by category. The values pre-filled here are samples only. Replace them with the figures from your own rate card and settlement report.

Frequently asked questions

What is RTO in e-commerce?

Return to origin: a shipment that is not delivered and comes back to the seller.

How does RTO affect profit?

You pay forward and return shipping with no sale, and the ad cost of the order is lost.

What is a good RTO rate?

It varies by category and region. Lower is always better, and the break-even figure shows your limit.

How can I reduce RTO?

Verify orders by phone or message and offer a discount for prepaid payment.

Is the COD fee charged on RTO?

Usually not. The tool charges it only on delivered orders.