Breakeven ROAS calculator
The ROAS your store needs before an ad makes money, with COD share and RTO included. Enter per-order figures; every number stays in your browser.
Use this in your kill and scale rules. Below it, the ad loses money on every order.
The true economics, once RTO orders are removed from revenue.
Contribution per order before ads, averaged across prepaid, delivered COD and RTO.
How the breakeven is worked out
ROAS is revenue divided by ad spend, so breakeven ROAS is the revenue you need for every rupee of ad spend to be paid back by what the order leaves behind. That leftover is the contribution per order: selling price minus product cost, shipping and payment costs. The calculator works it out for three kinds of order and averages them by how often each happens.
- Prepaid order: price − product cost − forward shipping − gateway fee.
- COD order, delivered: price − product cost − forward shipping − COD handling fee.
- COD order, returned (RTO): no revenue, and you pay forward shipping plus return shipping. The product comes back to stock.
Breakeven ROAS as Ads Manager reports it is selling price ÷ average contribution, because Meta counts every purchase at full value, including the ones that never get delivered. The delivered-revenue breakeven divides collected revenue by the same contribution instead. The target ROAS holds back the margin you want to keep before ads are paid for.
A worked example
A kurta set sells for ₹1,499 and costs ₹550 to make and pack. Forward shipping is ₹80, the gateway takes 2% on prepaid, 60% of orders are COD with a ₹40 collection fee, and a quarter of COD orders come back at ₹80 return shipping.
- Prepaid contribution: 1,499 − 550 − 80 − 30 = ₹839
- COD delivered: 1,499 − 550 − 80 − 40 = ₹829; COD returned: −(80 + 80) = −₹160
- Average COD order: 0.75 × 829 + 0.25 × (−160) = ₹582
- Average across all orders: 0.4 × 839 + 0.6 × 582 = ₹685
- Breakeven ROAS, reported: 1,499 ÷ 685 = 2.19x
At a 3.0x reported ROAS this brand makes money. At 2.0x it loses about ₹65 on every order and would not know, because Ads Manager shows a return on spend either way. Bring RTO down to 15% and the breakeven drops to roughly 2.0x, which is why RTO is the first lever, not creative.
Common questions
What ROAS does an Indian fashion brand need to break even?
It depends on the margin structure, not the category, but the pattern is consistent: a D2C fashion brand with a ₹1,500 order, 60% product margin, 60% COD share and 25% RTO on COD breaks even at roughly 2.2x on the ROAS Meta reports. Brands with higher COD share or RTO above 30% usually need 2.5x to 3x just to stand still. The calculator above gives your own number from your own costs.
Why is the breakeven on reported ROAS different from the one on delivered revenue?
Meta counts every purchase event at full order value, including COD orders that later come back undelivered. So the ROAS in Ads Manager is measured against booked revenue, while your money only arrives on delivered revenue. The reported breakeven is the number to use in Ads Manager rules; the delivered one is the true economics.
Should the breakeven ROAS be set on the campaign or the account?
Compute it once for the store, then apply it to every campaign. Campaigns that sell higher-margin or lower-RTO products can have their own figure, but only if the campaign is genuinely restricted to those products. In most accounts one store-level breakeven is both accurate enough and much harder to game.
Does the calculator account for repeat purchases?
No, deliberately. Repeat revenue makes first-order breakeven look better than it is, and most Indian fashion brands have less repeat behaviour than they assume. Work out the first-order number first. If you have measured repeat rate over 90 days, lower the margin target rather than the breakeven.
What if my contribution per order is negative before ads?
Then no ROAS breaks even, and the calculator says so. That is not a media problem. Fix the margin first: raise the price, cut the COD share with a prepaid incentive, reduce RTO through order confirmation, or change the product mix. Spending on ads before that only scales the loss.
Is your account judged against this number?
Every account we run is checked automatically against its own breakeven, every hour. The audit starts by working yours out from real costs and comparing it with what the account is doing.