Paid Acquisition
A 4x ROAS can still mean you're losing money. Enter your numbers to find the minimum ROAS you actually need — and see what RTO is doing to that number.
Most brands optimise toward a target ROAS without knowing what their actual break-even is. This calculator gives you that number — adjusted for shipping costs, payment fees, and RTO losses that most ROAS calculations ignore.
Your unit economics
Average Order Value / AOV (₹)
Average revenue per order
Product Cost / COGS (₹)
Manufacturing or sourcing cost per unit
Shipping Cost (₹)
Forward shipping per order
Payment Gateway Fee (%)
Razorpay / Cashfree is typically 2%
Other Variable Costs (₹)
Packaging, inserts, COD fee if applicable
RTO — leave blank if prepaid only
COD / RTO Rate (%)
Enter your estimated return rate on COD orders
Return Shipping Cost (₹)
Cost per rejected order coming back
Your current performance — optional
Your Actual ROAS
Enter this to see your real profit per order
Worked Example
A fashion accessories brand selling at ₹1,800 AOV. COGS ₹500, shipping ₹120, payment fee 2% (₹36), packaging ₹40. Running 30% COD with a 25% RTO rate and ₹100 return shipping.
Contribution per order = ₹1,800 − ₹500 − ₹120 − ₹36 − ₹40 = ₹1,104
Break-even ROAS (no RTO) = ₹1,800 ÷ ₹1,104 = 1.63x
RTO cost per 100 orders = 25 × (₹120 + ₹100 + ₹40) = ₹6,500
Effective contribution = ₹1,104 − ₹65 = ₹1,039
Break-even ROAS with RTO = ₹1,800 ÷ ₹1,039 = 1.73x
A brand running at 2x ROAS thinks they are comfortably profitable. After RTO, they have ₹1,039 in margin to cover that ad spend — which at 2x ROAS means ₹900 in ad cost per order. Actual profit: ₹139 per delivered order. One bad RTO month eliminates it.
Common Questions
What is break-even ROAS and why does it matter?
Break-even ROAS is the minimum return on ad spend at which you cover all variable costs without making a loss. It is calculated as AOV divided by contribution margin per order. Most brands run ads toward a target ROAS without knowing what their break-even is — which means they often scale spend at a loss without realising it.
Why is my break-even ROAS different from my target ROAS?
Break-even ROAS covers costs. Target ROAS is what you need to hit a desired profit margin. Your target ROAS should always be higher than your break-even. If your actual ROAS is between the two, you are covering costs but not hitting your margin goal. If it is below break-even, you are losing money on every order.
How does RTO affect break-even ROAS?
RTO (return to origin) adds two-way shipping costs and packaging costs to orders that never generate revenue. At a 25% RTO rate, for every 100 orders shipped you are paying forward and return shipping on 25 that earn you nothing. This reduces your effective contribution margin and raises the ROAS you need to break even. Brands that ignore RTO in their ROAS targets consistently overestimate profitability.
Does this calculator work for prepaid-only businesses?
Yes. Leave the RTO fields blank and the calculator will give you your base break-even without any return adjustment. Prepaid brands in India typically see much lower RTO rates (3 to 8%) compared to COD-heavy brands (20 to 40%), so your break-even will be lower and your margin per order healthier.