Seller ProfitProfit on t-shirts and clothing: a worked example
How this kind of product earns or loses money online, with example figures you can replace by your own.
How this product sells
Clothing is a size-and-fit product. Customers cannot try it on, so many order two sizes and send one back, or return it for a colour that looks different on screen. Returns are the biggest hidden cost.
What to watch
Return rate by size, packaging that keeps a folded shirt clean, a size chart in the photos, fabric weight, colour accuracy in photos, seasonal stock that does not sell after the season.
A worked example with made-up numbers
The cost, price and every fee below are made up to show the working in Indian rupee; they are not the fees of any marketplace and the GST rate is an example. Replace each with your own.
| Selling price (GST included) | ₹599 |
| Sale value without GST | ₹570.48 |
| Cost of the unit | -₹210 |
| Fees and shipping (example percentages) | -₹159.87 |
| Packaging and advertising | -₹37.00 |
| Profit per delivered unit | ₹163.61 |
| Margin | 28.7% |
| Expected profit per order placed, after 18% returns | ₹108.96 |
What changes the answer
- If returns double to 36%, the expected profit per order placed becomes ₹54.31.
- If the advertising cost per order doubles, the profit per delivered unit becomes ₹138.61.
- If you cut the price by 10 percent, the profit per delivered unit becomes ₹114.55 (margin 22.3%).
A tip for this product
Put a measurement chart in the second photo, in centimetres across the chest and length. It is the cheapest way to lower returns, and every return you avoid saves the shipping both ways.
Try your own figures
Common questions
Why is the return rate so high in the example?
Clothing is often ordered in more than one size. The example uses 18 percent for illustration; your own return report in the seller account gives the real figure, and it can be higher or lower by category.
Should I add a size chart image?
Yes. A clear chart and a model photo with the model height and size cut wrong-size orders, which are the most common reason for a return.
Keep going
Fee percentages, GST rates and other figures in the examples on this site are made up to show the working. They are not the fees or rates of any marketplace or country: type the numbers from your own seller account and from the tax authority. Checked 14 November 2026.