In short
- Break-even ROAS = selling price ÷ profit per order before ads.
- GST is inside the price Meta reports, so it must come out before you count profit.
- RTO orders cost you shipping both ways and earn nothing, which pushes break-even ROAS up fast.
- Run ads to a target ROAS above break-even, so there is profit left after ad spend.
How the calculator works
Meta and Google report ROAS as purchase value divided by ad spend. Purchase value is what the customer paid, GST included, and it counts every order placed, including ones that later come back undelivered. So the honest question is: for every order the ad platform reports, how much profit do you really keep?
The calculator works per order placed:
- Net sales: price without GST, for the orders that are delivered (100% minus your RTO rate).
- Minus product cost for delivered orders. Returned stock usually goes back on the shelf, so it is not counted as lost.
- Minus shipping and packing on every order shipped, delivered or not.
- Minus return shipping on the RTO share.
- Minus payment or COD fees on delivered orders.
What is left is your profit per order before ads. That is also the most you can pay for one order (break-even CPA). Divide the selling price by it and you get break-even ROAS.
A worked example
Take a ₹1,499 face serum (example numbers, the calculator's defaults):
| Line | Per order placed |
|---|---|
| Price ₹1,499 incl. 18% GST, 88% delivered | Net sales ₹1,118 |
| Product cost ₹380 × 88% | − ₹334 |
| Shipping and packing on every order | − ₹90 |
| Return shipping ₹70 × 12% RTO | − ₹8 |
| Payment fees 2% on delivered orders | − ₹26 |
| Profit per order before ads | ₹659 |
Break-even ROAS is ₹1,499 ÷ ₹659 = 2.28x. If Meta shows a ROAS of 2.0x, every order is losing about ₹90. To keep a 10% profit after ads, the target is about 2.74x.
Notice how RTO and GST move the answer. Ignore them and the same product looks like it breaks even at about 1.5x, which is how many brands end up scaling ads that quietly lose money.
What is a good ROAS for a D2C brand?
There is no universal good ROAS; there is only your break-even and your target. A brand with 80% gross margins can grow happily at 1.8x, while a low-margin brand can lose money at 3x. That is why the number to watch is the gap between your actual ROAS and your break-even ROAS, not the ROAS on its own.
Two more things to keep in mind:
- First orders vs lifetime: if customers reorder, you can afford a lower ROAS on the first order. Only do this if you actually see the repeat purchases in your data.
- Reported vs real: platform ROAS can over- or under-count. Check it against your store's own sales every week.
How to lower your break-even ROAS
The fastest wins usually sit outside the ad account:
- Raise average order value with bundles, a free-shipping threshold or a second-product offer at checkout.
- Cut RTO by confirming COD orders on WhatsApp, nudging COD buyers to prepay with a small discount, and blocking repeat RTO pincodes.
- Negotiate shipping as volume grows, and right-size packaging.
- Fix the store so more visitors buy: product photos, reviews, clear delivery dates and a fast mobile page. Our free store audit shows which of these is costing you most.
How MarketMind uses your break-even ROAS
When you set up MarketMind, your margin feeds this same maths. Every morning the agent compares each campaign's ROAS with your break-even: ad sets below it are paused or fixed, ad sets well above your target get more budget, all inside the monthly spend cap you set. Every change is written in plain words in your dashboard.
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Questions founders ask
What is break-even ROAS?
It is the return on ad spend at which your ads neither make nor lose money. It equals your selling price divided by the profit you keep on an order before ads.
Should I include GST when calculating ROAS?
Yes. Meta and Google report purchase value including GST, but GST is not your money. Take it out of the price before counting profit, or your break-even ROAS will look lower than it really is.
How does RTO affect ROAS?
An RTO order is counted as a sale by the ad platform, but you earn nothing and pay shipping both ways. The higher your RTO rate, the higher the ROAS you need to break even.
What is a good ROAS for Meta ads in India?
Any ROAS above your own break-even ROAS is profitable. Use this calculator to find yours, then set a target a little above it so there is profit left after ad spend.
What is the difference between ROAS and CPA?
ROAS is sales divided by ad spend; CPA is ad spend divided by orders. Your break-even CPA is your profit per order before ads, the most you can pay to win one order.