Real profit per order = net amount settled by the marketplace, minus product cost, packaging, any logistics you pay separately, allocated ad spend and the cost of returns. Start from the settlement report, not the listing price, because fees, shipping charges, adjustments and tax deductions all change what you actually receive. Then allocate costs the settlement does not show.
Start with the settlement, not the listing price
The selling price on your listing is not your revenue. What matters is what the marketplace settles to your bank account after commission, fixed fees, shipping or fulfilment charges, GST on those fees, adjustments and any tax deductions.
Download the order-level settlement or payment report from your Amazon Seller Central and Flipkart Seller Hub accounts. Report names and columns change from time to time, so check the current layout in your dashboard. Match each row to an order ID and SKU. If you only look at the monthly bank credit, you cannot see which orders made money.
The formula for real profit per order
Use the same formula for every marketplace so the numbers are comparable:
- Taxable selling value of the order (GST you collect is a pass-through, not income).
- Minus marketplace charges: commission, fixed or closing fee, shipping or fulfilment fee, other service fees, and the GST on those fees as shown in the settlement.
- Equals net marketplace earning.
- Minus landed product cost (COGS), including inbound freight and any customs or handling you pay.
- Minus packaging and consumables per order.
- Minus allocated advertising spend for that SKU or order.
- Minus return and cancellation cost (explained below).
- Equals real profit per order.
Divide by taxable selling value to get the margin percentage. Keep one consistent base.
Costs that never appear in the settlement
Settlement reports show what the marketplace charged. They do not show what you spent. Add these yourself:
- COGS per unit, from purchase invoices rather than an estimate.
- Packaging: boxes, tape, inserts, branded mailers.
- Ads: sponsored product spend from the ad console, spread across SKUs that earned the sales.
- Storage and handling if you hold stock in marketplace warehouses and are billed outside the order settlement.
- Your own overheads (team, software), if you want fully loaded profit rather than contribution profit.
Treat returns as a cost, not a footnote
Returns are where order-level profit usually breaks. A returned order may reverse the sale but not every fee, and reverse shipping can be charged to you. Returned stock may come back damaged, be marked unsellable, or not come back at all.
For each return, record: refund reversed, fees retained or refunded, reverse logistics charge, and the value of stock that cannot be resold. Then spread the net return loss across the SKU's orders, or use the actual return rate for that SKU over the same period. Read the returns and claims sections of your seller agreement to see when you can raise a case for lost or damaged returns, and note the time limits.
Check fees against your agreed terms
Profit built on wrong fees is wrong profit. Compare the fees charged in the settlement with your seller agreement and the current rate card for your category and price band. Do not rely on a rate you remember or one from another seller, because rates and fee structures are revised. Confirm the latest terms in your seller dashboard or with your account manager.
Look for commission charged on the wrong slab, weight-slab shipping fees that do not match your product's actual weight, duplicate charges, and fees not reversed on cancelled orders. For GST, TCS and TDS appearing in settlements, ask your tax adviser how to treat them in your books. They affect cash received and credits, and should not be mixed up with product margin.
Make it repeatable
Build the calculation as a monthly sheet with one row per order, then summarise by SKU and by marketplace. Flag any SKU with negative or very thin profit, and any order where the fee differs from what your terms imply.
Doing this by hand across two marketplaces gets slow once volumes grow. MarketplaceMetrics by Fundle reconciles sales against settlements, checks commissions and fees against agreed terms, and tracks returns and recovery cases. Myntra Excel reports are reviewed today, while Amazon and Flipkart coverage is a scope discussion, so confirm what is available for your setup.
Worked example
Illustrative example only. All figures are made up to show the method. Use your own settlement data and costs.
| Line | Amount (₹, illustrative) |
|---|---|
| Taxable selling value | 1,000 |
| Commission and fixed fees (incl. GST on fees, per settlement) | -190 |
| Shipping or fulfilment fee (incl. GST on fee) | -70 |
| Net marketplace earning | 740 |
| Landed product cost | -450 |
| Packaging | -15 |
| Allocated ad spend | -40 |
| Return cost allowance (SKU average) | -30 |
| Real profit per order | 205 |
Margin on taxable selling value is 205 / 1,000 = 20.5% in this illustration. If the return allowance doubled to ₹60, profit would fall to ₹175, which shows why return rates deserve their own line.
Questions and answers
What is the difference between settlement amount and real profit?
The settlement amount is what the marketplace pays you after its charges and adjustments. Real profit goes further by deducting your product cost, packaging, ad spend, return losses and any other costs you carry that the marketplace never shows in its report.
Should I include GST when calculating profit per order?
Calculate on taxable value, because GST collected is passed on to the government and is not your income. Fees charged to you may include GST, which you may be able to claim as input credit. Confirm the treatment with your tax adviser.
How do I find the current Amazon and Flipkart fee rates?
Check your seller agreement, the current rate card for your category in Seller Central or Seller Hub, and recent settlement reports. Rates and slabs get revised, so do not use old figures. Ask your account manager if a charge looks inconsistent.
How often should I calculate profit per order?
Review monthly at SKU level, and weekly for new launches, heavy ad spend or categories with high returns. Settlement cycles differ across marketplaces, so compare orders by order date and track pending settlements separately.