How this calculation works
A dispatched order can be kept or fully refunded. The listed price must support the weighted outcome of both branches when the target is average profit per dispatch. Charging only enough to hit the target on a kept order can miss the return cost.
Required price = (expected non-price costs + target profit) / expected net retained share of priceA worked example
The illustrative product and shipping costs with a 10 percent return rate and partial percentage-fee credits require a listed price of about 776.40 to target 100 expected profit per dispatched order.
Good to know
Two-outcome kept/full-return model. No RTO branch, tax, advertising, partial refunds, exchange orders or live platform policy. Recovery is original product-cost value, not cash resale.
Expected profit is not kept-order profit
A dispatched order can be kept or fully refunded. The listed price must support the weighted outcome of both branches when the target is average profit per dispatch. Charging only enough to hit the target on a kept order can miss the return cost.
The returned branch reverses the full customer payment. It retains only the specified percentage-fee credit and the recoverable portion of original product cost. Fixed fees and outbound shipping remain costs in both branches.
The Payment gateway settlement reconciliation calculator checks the eventual bank deposit against capture, fee, refund and reserve totals. A target selling price and a reconciled bank settlement are different steps in the commercial workflow.
A recovered item is not a second cash sale
Recovery is expressed as a percentage of acquisition cost. It recognizes retained inventory value after a return, not a promise that the item sells again immediately or at the original listed price. Return shipping is a separate extra expense.
Enter the marketplace fee and refund policy you actually expect. If retained revenue cannot cover the percentage-fee burden under the entered return assumptions, the model rejects the scenario rather than returning a misleading negative selling price.
Compare fee credits before changing product price
Set fee refund to zero, then restore the expected credit. The difference isolates the policy’s contribution to the required price. Separately change product recovery to inspect the importance of returned stock condition.
This price is before tax and excludes advertising, partial refunds and exchange orders. It is a scenario for a single product and an entered probability, not a guarantee of market demand or a current marketplace fee quotation.
Work through the example
The illustrative product and shipping costs with a 10 percent return rate and partial percentage-fee credits require a listed price of about 776.40 to target 100 expected profit per dispatched order.
Use the worked table to trace where each input enters. Then change one assumption and calculate again, leaving the others fixed. A comparison is easier to interpret when the change has one identifiable cause rather than a different set of measurements, dates and rates all at once.
What this model does not establish
Two-outcome kept/full-return model. No RTO branch, tax, advertising, partial refunds, exchange orders or live platform policy. Recovery is original product-cost value, not cash resale.
Keep the input assumptions with any exported result. Illustrative values do not become observations merely because the output is precise. For a real purchase, financial reconciliation or technical decision, check the underlying records and applicable requirements before treating this scenario as a final answer.
A few questions, answered
What formula does the calculator use?
Required price = (expected non-price costs + target profit) / expected net retained share of price
What should I verify before using this result?
Two-outcome kept/full-return model. No RTO branch, tax, advertising, partial refunds, exchange orders or live platform policy. Recovery is original product-cost value, not cash resale.
Are the example inputs live records?
No. They are an illustrative calculation case. Replace them with records and measurements appropriate to your situation.