Dropshipping profit calculator with RTO, COD and ad costs
This dropshipping profit calculator works out what one order really earns once every cost is in: the supplier’s price, the shipping you pay, payment gateway and cash-on-delivery fees, your ad cost per order and — the cost most calculators leave out — RTO (return to origin) and returns. It then turns that into monthly profit after your fixed costs, and tells you the break-even CPA, the break-even ROAS and the highest RTO rate your store can survive.
It works as a general ecommerce profit calculator for any online store, in rupees, dollars, pounds or euros. Indian D2C sellers can model a cash-on-delivery share and COD charges; stores that only take prepaid orders set the COD share to 0. All the arithmetic runs in your browser.
How to use the Dropshipping Profit Calculator (with RTO)
- Choose the currency and enter orders per month and your fixed monthly costs (store plan, apps, staff).
- Enter the selling price, any shipping you charge, the tax included in the price, the supplier’s product cost, the shipping you pay and packaging.
- Enter your payment gateway fee, the share of cash-on-delivery orders and the COD fee your courier charges.
- Enter your ad cost per order (ad spend ÷ orders placed), your RTO/return rate, the charge per RTO and the share of returned stock you cannot resell.
- Read profit per order, monthly profit and the break-even figures, and copy the breakdown.
Dropshipping Profit Calculator (with RTO) features
RTO built into the maths
Undelivered and returned orders earn nothing, lose forward and return shipping and packaging, and can write off stock.
Prepaid and COD mix
Gateway fees apply to prepaid orders and COD charges to cash-on-delivery orders, in the proportion you set.
Break-even CPA and ROAS
The most you can pay in ads per order, and the matching return on ad spend, before an order loses money.
Maximum RTO rate
The return rate at which profit hits zero for your current price, costs and CPA.
Monthly view
Profit per order × orders − fixed costs, and the number of orders needed to cover those fixed costs.
How the profit per order is calculated
- Net sales = (price + shipping charged) ÷ (1 + tax rate). With no tax, ₹999 stays ₹999.
- Fees = gateway % × order × prepaid share + COD fee × COD share. Default: 2% × ₹999 × 40% + ₹30 × 60% = ₹25.99.
- Profit on a delivered order = net sales − fees − product cost − shipping − packaging = ₹999 − ₹25.99 − ₹350 − ₹70 − ₹10 = ₹543.01.
- Loss on an RTO = shipping + packaging + RTO charge + unsellable share of product cost = ₹70 + ₹10 + ₹70 + ₹35 = ₹185.
- Profit per order placed = (1 − RTO rate) × delivered profit − RTO rate × RTO loss − CPA = 0.8 × ₹543.01 − 0.2 × ₹185 − ₹150 = ₹247.41.
- Break-even CPA = the same figure before ads = ₹397.41. Break-even ROAS = order value ÷ break-even CPA = 2.51×.
Why RTO hurts so much
An RTO order costs you twice: you pay to ship it out, then a return-to-origin charge to bring it back, and you still paid the ads that produced it. At a 20% RTO rate in the example, returns take ₹37 from every order placed and remove a fifth of the delivered profit. The highest RTO rate before a loss tells you how much headroom you have — 54% here, but far less on a low-margin product.
Ways to cut it: confirm COD orders by call or message before dispatch, offer a small prepaid discount, block repeat RTO pin codes, and write accurate product pages and size charts.
Limits
- Fees are averaged over the prepaid/COD mix of all orders; in practice RTO is concentrated in COD orders.
- Gateway fees on refunded prepaid orders and marketplace commissions are not modelled — use the marketplace seller profit calculator for marketplace fee cards.
- Income tax, GST input credits and currency conversion are outside the model. This is an estimate, not financial or tax advice.
- Plan your ad budget with the CPM, CPC and CPA calculator and the ROAS calculator.
Dropshipping Profit Calculator (with RTO) FAQ
How do I calculate dropshipping profit?
Selling price minus supplier cost, shipping, payment fees and ad cost per order gives profit on a delivered order. Then weight it by your delivery rate and subtract what each RTO or return costs. This dropshipping profit calculator does both and adds your fixed monthly costs.
What is RTO in e-commerce?
Return to origin: an order the courier could not deliver — the customer refused it, was unreachable or gave a wrong address — so it is shipped back to the seller. It is most common with cash-on-delivery orders.
What is a good RTO percentage?
It varies by category and region. The useful number is your own break-even RTO rate, which the calculator shows; stay well below it.
What is break-even CPA?
The highest advertising cost per order at which an order still breaks even, after product, shipping, fees and expected returns. Pay less than this per order and ads are profitable.
Does it work for Shopify or other store builders?
Yes. Enter the platform’s monthly plan and app costs as fixed monthly costs, and its payment processing rate as the gateway fee.
Should I include GST in the selling price?
If the price you show includes GST or VAT, enter that rate so the tax is taken out of your revenue. If tax is added on top at checkout, or you are not registered, leave it at 0.