Free tool
The RoAS you actually need
After cost of goods, commission, fulfilment and returns, not the round number someone set as a target three years ago.
Include RTO on COD orders — it is usually the larger half.
Break-even RoAS
2.64×
Below this you lose money
Target RoAS
3.59×
To hit 10% contribution
- Gross contribution per shipped order
- ₹400
- After spreading return losses
- ₹379
- Contribution margin before ads
- 37.9%
How this works
Break-even RoAS is your selling price divided by what an order contributes before advertising. Everything turns on getting that contribution figure right, which means including the costs that usually get left out.
The one most often missed is returns. A returned order pays fulfilment in both directions and recovers no revenue, so its cost has to be spread across the orders that stick. At a 20% return rate every four delivered orders are carrying a fifth that came back.
If the calculator tells you no RoAS makes the SKU profitable, that is a real answer rather than an error. It means the unit economics need fixing before any amount of media optimisation will help.
Want us to run this on your actual numbers?
Thirty minutes, no deck. We'll look at your accounts and tell you what we'd change.