How to Calculate Real Amazon Profit per SKU (With a Full P&L Example)
A worked example for 1,000 orders that shows where profit really goes: returns, lost parcels and advertising — and why sales alone can mislead you.
Sales figures make most Amazon businesses look healthy. Profit tells the real story. In this guide we walk through a simple, realistic profit and loss for one month and show where the money goes.
The numbers below are an example to show the method. Use the Amazon profit calculator to run your own.
The example month
- 1,000 orders shipped, average selling price ₹500
- Amazon fees (referral, closing and shipping) average ₹140 per order, so the payout per kept order is ₹360
- Product cost ₹220 per unit
- 12% return rate → 120 returns, each with about ₹60 in return charges
- Of those returns, 8 never came back and 4 came back damaged or wrong
- Advertising ₹45,000
The profit and loss
| Line | Calculation | Amount |
|---|---|---|
| Payout on kept orders | 880 × ₹360 | ₹3,16,800 |
| Product cost of kept orders | 880 × ₹220 | − ₹1,93,600 |
| Return charges | 120 × ₹60 | − ₹7,200 |
| Products lost (not returned / damaged) | 12 × ₹220 | − ₹2,640 |
| Advertising | − ₹45,000 | |
| Profit for the month | ₹68,360 |
Sales were ₹5,00,000. Profit is ₹68,360 — about 13.7% of sales.
Where sellers lose track
1. Lost returns. The 12 lost or damaged returns cost ₹2,640 in product alone. This money can often be recovered with a SAFE-T claim — but only if someone notices. See how to file a SAFE-T claim.
2. Advertising. Ads are not tied to one order, so many sellers leave them out of per-order profit. Here they take two-thirds of the order profit.
3. Profit per SKU. The monthly total hides your loss-makers. Split the same month into its two SKUs:
| SKU | Orders | Return rate | Profit per order | Monthly profit |
|---|---|---|---|---|
| Storage rack | 600 | 6% | ₹118 | ₹70,800 |
| Kids shelf | 400 | 21% | − ₹6.10 | − ₹2,440 |
The kids shelf sells well and looks fine on the sales report — but after returns it loses money on every order. Raising its price, improving the listing or fixing the packaging would change the month far more than more ads.
How to get this report every month
To do this properly you need, for every order: the actual payout from the payment report, the product cost from your SKU master, the return status and any claims. Then you deduct advertising and charges that have no order ID.
Our Amazon profit and loss tool builds this from your reports automatically: profit per order, per SKU and per month, loss-making orders listed separately, and an Excel export with order, SKU and summary sheets.