RedHub AI
Quick Kit · The Math
How the math works
The 37% margin that isn't
A product with a healthy gross margin can still lose money once returns are netted out. Here's the exact arithmetic the kit runs on every SKU.
The inputs (one high-return SKU)
Units sold
200
× $35 price · $22 cost
Return rate
40%
80 come back
Recovery
40%
of cost resold
Cost / return
$9
to process
120 kept × $13 − 80 ret'd × $22.20
= $1,560 kept margin − $1,776 return cost = −$216 net, on a 37% gross margin
True profit · this SKU
-$216after returns
Verdict: drop or fix
Gross margin said 37%. Returns turned it negative.
Each return costs $22.20 — the $9 to process plus $13.20 of stock you never resell. The kit nets that out per SKU and hands each a keep / fix returns / drop verdict.
Per-return cost = your processing cost + unrecovered stock (unit cost × the share you can't resell) — figures you set per product.