Break-even ROAS calculator

Find the ROAS your ads need just to stop losing money. Built for Indian fashion and D2C brands, with returns and RTO included.

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Your break-even ROAS
2.22x

Every ₹1 of ad spend has to bring back ₹2.22 in revenue before you make a profit.

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How break-even ROAS is calculated

Your ads break even when the profit from each order exactly covers the ad spend it took to get it. The formula is:

Break-even ROAS = AOV ÷ (AOV × (1 − returns %) × gross margin % − shipping per order)

Worked example

A kurta brand with a ₹2,500 average order, 60% gross margin, 15% returns and RTO, and ₹150 shipping and packaging per order:

StepValue
Revenue kept after returns₹2,500 × 85% = ₹2,125
Gross profit on that₹2,125 × 60% = ₹1,275
Minus shipping and packaging₹1,275 − ₹150 = ₹1,125
Break-even ROAS₹2,500 ÷ ₹1,125 = 2.22x

So this brand needs at least 2.22x ROAS in Ads Manager just to break even on each order. Anything above that is profit before overheads.

What to do with your number

  • Below break-even: fix the funnel before adding budget. Look at tracking, creative and your product page.
  • Just above it: you're profitable but fragile. Test creative and retargeting before scaling.
  • Well above it: you have room to scale. Raise budgets gradually and watch that ROAS stays above the line.

Want to know where your account sits against this line? Read what a good ROAS is for fashion brands in India, or book a free audit.

Break-even ROAS FAQ

What is break-even ROAS?
Break-even ROAS is the return on ad spend at which your ads exactly pay for themselves: no profit, no loss. Below it, every sale from ads loses money; above it, you're profitable.
How do you calculate break-even ROAS?
Divide your average order value by the profit you make on an order before ad spend. Profit is the order value, minus returns, times your gross margin, minus shipping and packaging.
What is a good ROAS for a fashion brand in India?
A good ROAS is one comfortably above your own break-even ROAS, so there's room for profit after returns and overheads. Use the calculator to find your line, then read our guide to a good ROAS for fashion brands.
Should I include returns and RTO?
Yes, especially for fashion and cash-on-delivery orders in India. Returns and RTO reduce the revenue you actually keep, which raises the ROAS you need to break even.

Above or below your line?

In a free 15-minute audit we check your account against your break-even ROAS and show you what to fix first.

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