Cash on delivery has hidden costs. Calculate your real profit after RTO returns and courier fees.
Enter selling price, product cost, forward shipping, RTO (return) shipping, COD fee, your RTO percentage and monthly order volume. For each delivered order the tool computes profit as selling price minus product cost minus forward shipping minus COD fee. For each returned (RTO) order you lose forward plus return shipping with no sale. Net monthly profit = (delivered orders x profit per delivered) minus (returned orders x loss per RTO).
At ₹1,200 price, ₹600 cost, ₹70 forward, ₹70 RTO shipping, ₹30 COD fee, a 25% RTO rate and 100 orders: 75 delivered orders earn ₹500 each (₹37,500) while 25 returns lose ₹140 each (₹3,500), leaving about ₹34,000 net profit, or roughly ₹340 average per order across all 100.
COD carries a per-order COD fee and a much higher RTO rate; every return costs you forward and return freight with zero sale, so a handful of RTOs can wipe out the profit from several delivered orders.
COD RTO commonly runs around 15-30% in India depending on category, price and pincode. Check your own courier dashboard rather than guessing, since fashion and high-value COD orders tend to return more.
Confirm orders on WhatsApp or IVR before dispatch, offer small prepaid discounts to shift customers to UPI, flag risky pincodes, and keep delivery fast so buyers do not change their mind.
No. It covers shipping, COD fee and RTO loss. Remember COD also delays your cash by the courier's remittance cycle (often 7-15 days), which strains working capital on top of the losses shown.
Commmerce scores customers and routes orders to reduce returns and protect your COD margin.
See Fulfilment & Delivery
