How to Calculate Your Real Profit on Meesho, Flipkart and Amazon

Most new sellers look at one number: selling price minus what the product cost me. That number is almost always too high. After the marketplace takes its share and some orders come back, the money that really reaches your bank is smaller, and many sellers find that a few of their SKUs are quietly losing money.

The real profit formula

For every SKU, work out profit like this:

"Money received" is the settlement amount in your payment report, not the price the customer saw. Let us see what sits between the two.

What is deducted before you get paid

• Commission / fixed fee: the marketplace's share. Rates differ by marketplace and category, so always read your latest rate card.
• Shipping or logistics charge: usually based on weight and distance. A wrong weight on your listing can raise it.
• Payment collection fee (mostly on COD or prepaid orders, depending on the marketplace).
• GST on the fees they charge you, and TCS / TDS that the marketplace deducts and deposits on your behalf. TCS and TDS are not a cost in the end (you claim them), but they reduce the cash you receive.
• Return and RTO charges: when an order comes back, you may lose the sale, pay shipping both ways, and receive a damaged product.
• Ads: money you spend to get orders, charged separately.

A worked example (numbers are only for illustration)

Item	Amount (₹)
Customer price	499
Fees, shipping and taxes deducted by the marketplace	−110
Settlement you receive	389
Product cost	−240
Packing	−12
Profit on a delivered order	137

Looks good. Now add returns. Suppose 3 out of every 10 orders of this SKU come back and each return costs you about ₹150 (shipping and a damaged or unsellable piece):

Out of 10 orders, 7 are delivered: 7 × 137 = ₹959. 3 return: 3 × −150 = −₹450. Net: ₹509 on 10 orders, about ₹51 per order, and that is before ads. If you spend ₹30 per order on ads, the real profit is only about ₹21 per order.

The same product that looked like ₹137 profit is really about ₹21. A 40% return rate would turn it into a loss.

Three mistakes that hide losses

1. Looking at the average, not the SKU. A few good SKUs hide a few bad ones. Always check profit SKU by SKU.
2. Ignoring the return rate. Two SKUs with the same margin can have very different profit if one returns twice as often.
3. Using the listed price instead of the settlement. Read the settlement report, because it shows what was really deducted per order.

How to do this every month

1. Download the orders / settlement report from each marketplace.
2. Match each order with its settlement amount.
3. Add your product cost per SKU (keep it in one sheet).
4. Subtract returns and ad spend.
5. Sort by profit, and look at the bottom of the list first.

In Excel this takes hours when you have thousands of orders. Seller Book reads the same reports and shows profit per SKU, per marketplace and per month, and marks the SKUs that lose money, so you can fix the price, stop the ads or stop selling them.