Quickstart guide

Get started with RTO Profit Simulator in minutes and calculate your first RTO impact analysis

Get started in 5 minutes

This guide will walk you through running RTO Profit Simulator locally and performing your first profitability analysis.

1. Clone and install

   First, clone the repository and install dependencies:

   npm

   git clone <repository-url>
   cd rto-profit-simulator/source
   npm install
   
2. Start the development server

   Launch the application in development mode:

   npm

   npm run dev
   

   The application will open at http://localhost:5173 (Vite’s default port).

3. Review default metrics

   Upon opening the app, you’ll see the dashboard with default values:

   • Monthly orders: 10,000
   • Average order value: ₹1,500
   • COD percentage: 60%
   • RTO percentage: 30%
   • Forward shipping cost: ₹60 per order
   • Return shipping cost: ₹60 per RTO
   • Product cost: ₹500 per order

   These defaults represent a typical Indian e-commerce business with a high RTO problem.

4. Input your business metrics

   In the Business Inputs card on the left sidebar, enter your actual business data:

   1. Monthly Orders - Your average monthly order volume
   2. Average Order Value - Mean transaction value in ₹
   3. COD Percentage - What % of orders are Cash on Delivery?
   4. RTO Percentage - What % of COD orders get returned?
   5. Shipping Costs - Your forward and return shipping costs per order
   6. Product Cost - Average cost of goods per order

   All metrics update in real-time as you type. The calculator automatically recalculates financial impact, break-even RTO percentage, and AI insights.

5. Analyze your results

   The Financial Impact Overview section displays six key metrics:

   • Total Revenue - Gross revenue from all orders
   • COD Orders - Number of COD orders placed
   • RTO Orders - Failed deliveries (shown in red)
   • Total RTO Loss - Complete financial loss from RTOs
   • Realized Revenue - Actual revenue after accounting for RTOs
   • Net Profit (Post-RTO) - Your bottom line after RTO losses

   Pay special attention to the Break-even RTO % indicator below these metrics. This shows the maximum sustainable RTO rate before your business becomes unprofitable.

   If your current RTO percentage exceeds the break-even threshold, you’re losing money on every order processed. This requires immediate attention.

6. Review AI-powered insights

   Scroll to the AI-Powered Business Insights section to see intelligent recommendations:

   • Critical RTO Alert - Warns if RTO exceeds 25%
   • Unprofitable Operation Alert - Triggers when RTO exceeds break-even
   • Partial COD Strategy - Suggests advance payment for high-risk orders
   • Prepaid Incentive Opportunity - Calculates profit improvement from COD-to-prepaid conversion

   These insights adapt dynamically based on your inputs.

7. Simulate optimization scenarios

   The What-If Scenarios: RTO Reduction Impact section lets you model improvements:

   • See potential savings from reducing RTO by 5%, 10%, or 15%
   • Each scenario shows saved orders and profit improvement
   • Use these projections to justify investments in fraud prevention, NDR management, or address verification

   Example: If reducing RTO from 30% to 20% saves ₹3.72L monthly, you can justify spending up to that amount on prevention tools.

8. Explore visual analytics

   Scroll to the charts section to see:

   • Financial Composition - Bar chart comparing Total Revenue, RTO Loss, and Net Profit
   • Impact of 10% RTO Reduction - Side-by-side comparison of current vs optimized performance

   These charts are interactive - hover over bars to see exact values.

9. Toggle annual projections

   Use the Monthly View / Annual Projection toggle in the header to see yearly impact:

   • All metrics multiply by 12 for annual view
   • Helps stakeholders understand long-term financial impact
   • Annual loss banner appears at the top showing total yearly RTO cost

   Example: A monthly RTO loss of ₹11.16L becomes ₹1.34 crore annually - much more impactful for C-level presentations.

10. Export your report

    Click the Export Report button in the top-right corner to generate a PDF containing:

    • Business inputs summary table
    • Financial impact overview with all KPIs
    • Optimization projections for 5%, 10%, and 15% RTO reductions

    The PDF is professionally formatted and ready to share with stakeholders.

Example: Calculate your RTO impact

Let’s walk through a realistic example:

Scenario: Fashion e-commerce brand

Business profile:

• Selling apparel and accessories in Tier 2/3 cities in India
• Strong COD preference among customers
• Struggling with fake orders and delivery rejections

Input metrics:

monthlyOrders: 8000
averageOrderValue: 1200
codPercentage: 70  // High COD due to Tier 2/3 focus
rtoPercentage: 35  // Poor address verification
forwardShippingCost: 50
returnShippingCost: 50
productCost: 400

Results

Financial Impact:

• Total Revenue: ₹96,00,000
• COD Orders: 5,600
• RTO Orders: 1,960 (35% of COD)
• Total RTO Loss: ₹9,80,000 monthly
• Net Profit (Post-RTO): ₹13,20,000 monthly

Break-even RTO: 63.3%

AI Insights triggered:

1. Critical RTO Alert - 35% RTO is dangerously high
2. Partial COD Strategy - Recommend ₹100-200 advance for unverified addresses
3. Prepaid Incentive Opportunity - Converting 10% COD to prepaid saves ₹2.38L monthly

Optimization scenarios:

• Reduce RTO to 30% (-5%): Save ₹2.50L monthly
• Reduce RTO to 25% (-10%): Save ₹5.00L monthly
• Reduce RTO to 20% (-15%): Save ₹7.50L monthly

Actionable next steps:

1. Implement OTP verification for all COD orders (cost: ₹1-2 per order)
2. Block high-risk pin codes or mandate partial payment
3. Offer 5% discount on prepaid orders to shift payment mix
4. Partner with logistics provider for better NDR management

Even implementing basic OTP verification and blocking the top 10% riskiest pin codes could reduce RTO by 5-10 percentage points, saving ₹2.5-5L monthly with minimal investment.

What’s next?

Installation guide

Set up a development environment and customize the simulator

Understanding calculations

Learn how metrics are calculated and break-even analysis works

Features overview

Explore all features including simulation, charts, and PDF export

Customization guide

Modify default values, add new metrics, or change branding