How the Return Rate Impact Calculator works
Returns are a hidden margin killer. Each return costs the outbound and return shipping, a refund administration fee, and often the unit itself if it comes back unsellable. Rather than guessing one rate, this calculator shows profit at six return rates side by side.
The loss-per-return setting controls how much of a sale each return destroys: 100% means the unit is a total loss, 50–70% reflects that many returns are resold.
Formula
- Returns cost per unit = Price × Return rate × Loss share
- Net profit(r) = Profit at 0% returns − Returns cost(r)
- Break-even return rate = Profit at 0% ÷ (Price × Loss share) × 100
Example
A $34.99 apparel item makes about $13 with no returns, but each 1% of returns costs $0.21, so profit is gone at a 60%+ return rate; at a realistic 12% it still earns about $10.60.
Frequently asked questions
What is a normal Amazon return rate?
2–5% for most hard goods, 10–20% for apparel and shoes, and 5–10% for electronics.
Why not 100% loss per return?
Amazon refunds most of the referral fee (keeping 20%) and many returns are resold as new or via Warehouse Deals. 100% is the worst case; 50–70% is a fair average.