Is Selling on Meesho Profitable? A Worked Example

Is selling on Meesho profitable

It can be, but the answer depends on the product and not on the marketplace. A product is profitable when the money from delivered orders covers the product cost, the packaging, the ads and the orders that come back. Nobody can promise you earnings, and this guide does not.

What you can do is test a product before you list it. The free Meesho profit calculator takes your price, your costs and your return and RTO rates, and shows profit per order and the return rate at which the profit reaches zero.

What decides whether a product makes money

Five things decide it, and the last three are the ones new sellers leave out.

• The margin on one delivered order: settlement price minus product cost and packaging.
• Ads cost, spread over every order you dispatch.
• How many orders come back, as customer returns and as RTO.
• Whether a returned product can be sold again or is lost.
• What a return costs you besides the lost sale: a return charge and damage.

A worked example with made-up numbers

These numbers are invented to show the method. They are not Meesho’s charges and not anyone’s real results. They are the same numbers the calculator loads when you press "Try the example".

Settlement price ₹300, product cost ₹150, packaging ₹10, ads ₹10 per order, loss per customer return ₹100, loss per RTO ₹0, returned products sold again, commission box empty. If every order were delivered, each would earn ₹300 − ₹150 − ₹10 − ₹10 = ₹130.

The same product at 10% and at 30% returns and RTO

At 10% the example product earns ₹110 for each dispatched order, and at 30% it earns ₹70. Half of the orders that come back are counted as customer returns and half as RTO.

When the same sale turns into a loss

The same sale turns into a loss when the margin is thin and returned stock cannot be sold again. Change two things in the example: the product cost is ₹200, and a product that comes back is written off.

Now the profit is ₹45 for each dispatched order at 10% and a loss of ₹25 at 30%. The break-even return and RTO rate, the point where profit is zero, drops from 65% in the first example to 22.9%. The price did not change; the cost and the returns did.

What to check before you list a product

Check six things before you list a product, and write the numbers down.

• The settlement you can expect, not the listing price. If you know only the selling price, find your commission rate first: see Meesho commission and charges.
• Your full cost for one unit, with packaging.
• The return and RTO rates of similar products you already sell. If you have none, test more than one rate.
• Whether the product usually comes back fit to sell again.
• What your payment file shows as deducted for a return and for an RTO.
• The break-even rate from the calculator, next to the return rate you expect. A small gap between them means a small mistake becomes a loss.

How to keep a product profitable

You keep a product profitable by working on the two numbers you control: the cost and the orders that come back. The ways to bring RTO down are in what RTO is in Meesho and how to reduce it.

From an estimate to your real numbers

The calculator gives an estimate before you sell; your reports give the answer after. Once orders are coming in, upload your order, payment and returns reports to the free Meesho seller dashboard. It shows returns, RTO and estimated profit for each SKU, so you can see which products earn.

Then go back to the Meesho profit calculator with your real rates and test a new price or a lower cost. The steps behind the figures are in how to calculate your real profit on Meesho.

Frequently asked questions