ROAS and Break-Even ROAS Calculator for Marketplace Sellers in India

Break-even ROAS is the lowest return on ad spend at which your ads do not lose money. It equals your selling price divided by your profit per unit before ads. If you sell at ₹1,000 and keep ₹250 after GST, product cost and marketplace fees, break-even ROAS is 4. Amazon's Sponsored Products guide calculates ROAS by dividing total sales by total ad spend, and its ROAS guide agrees. So at 4 every ₹1 of ads brings ₹4 of sales and the profit is gone. Use the calculator below with your own numbers.

What numbers does the calculator start with?

The defaults are placeholders for a single product, chosen to be easy to check by hand. They are not Amazon or Flipkart rates and not benchmarks. Replace each one.

• Selling price: ₹1,000, including GST.
• GST rate: 18%. This is a placeholder; your product's GST rate depends on its HSN code, so check the CBIC rate for it.
• Product cost: ₹400 per unit, excluding GST.
• Marketplace fees and shipping: ₹180 per unit, excluding GST. Take this from the fee calculator or settlement report of the marketplace you sell on, for example the Amazon seller fee calculator guide or Flipkart seller fees. Include commission, fixed or closing fee, shipping and collection fees.
• Return allowance: 0%. Raise it if returns cost you the item or the shipping.
• Target ROAS and ad figures: optional. Leave them as they are to see only the break-even.

Break-even ROAS is the same for every ad type, because it depends only on your unit economics. What changes by ad type is the ROAS you actually get.

How is break-even ROAS worked out?

Three steps, all arithmetic.

1. Take GST out of the price. Selling price ÷ (1 + GST rate). At ₹1,000 and 18%, that is ₹847.46. GST goes to the government, not to you.
2. Find profit before ads. Price excluding GST, minus product cost, minus marketplace fees and shipping. For example: ₹847.46 − ₹400 − ₹180 = ₹267.46.
3. Divide the price on your report's basis by that profit. If your ad report shows ad sales at the GST-inclusive price, break-even ROAS is ₹1,000 ÷ ₹267.46 = 3.74. If your report shows ad sales without GST, it is ₹847.46 ÷ ₹267.46 = 3.17.

Break-even ACOS is the same number flipped. Amazon describes ACOS as ad spend ÷ ad revenue × 100 and calls ROAS "the inverse" of it. So a break-even ROAS of 3.74 is a break-even ACOS of about 26.7%.

Why does the basis matter so much?

Because it moves your target by a fifth. With GST at 18%, the same product has a break-even ROAS of 3.74 on one basis and 3.17 on the other. If you set a target ROAS of 3.5 on the wrong basis, you either overspend or give up profitable clicks. Pick the basis once, write it next to the target, and keep it.

What ROAS should I aim for above break-even?

Break-even only means no loss. To make money you need a ROAS above it, and how far above depends on what the ad is for. Amazon's guide says a 2:1 ROAS is a little above the industry average it cites and that brands would ideally want closer to 3 or 4. That is a general US-dollar guide, not an Indian benchmark, and your margin decides what works for you. A product with a ₹267 profit on ₹1,000 needs about 3.7 just to stand still, so Amazon's "3 or 4" would not be enough for it.

A few sensible rules:

• Launch and rank-building: you may knowingly run below break-even for a short, fixed period. Set a budget and an end date.
• Defend and scale: aim for a ROAS clearly above break-even, say a margin of safety you are comfortable with, and review weekly.
• Slow stock: sometimes clearing stock at break-even is better than paying storage.

What does this calculator leave out?

• Organic lift. Ads can raise organic sales. ROAS only counts ad-attributed sales. For the whole-account view, use the TACoS calculator and read ACOS vs TACoS vs ROAS.
• Attribution windows. Marketplaces credit sales to ads over a window that differs by platform and ad type. Amazon's campaign reporting page does not state a default window for ROAS, ACOS or sales, so check the window in your own reports.
• Returns beyond the allowance. Refund-related fees differ by marketplace and category. Use your settlement report.
• Input tax credit and TCS. GST-registered sellers may claim credit on GST paid on inputs and on ad and fee invoices, and marketplaces collect TCS. This is general information, not tax advice; confirm treatment with a chartered accountant.
• Product-level differences. Run it per SKU. An account average hides the products that lose money.

FAQ

What is a good ROAS on Amazon India? There is no single good number. It depends on your margin. Amazon's guide cites a 2:1 ROAS as slightly above its industry average and suggests brands aim closer to 3 or 4. For a product with a thin margin, break-even ROAS may be higher than that, so calculate yours first.

How do I convert ROAS to ACOS? Divide 100 by ROAS. A ROAS of 4 is an ACOS of 25%. Amazon calls ROAS the inverse of ACOS. Use the same figure for revenue in both.

Is break-even ROAS the same on Flipkart? The formula is the same: price divided by profit before ads. The inputs differ because fees and shipping differ by marketplace. Flipkart's ad reports and their treatment of GST are not covered by the public pages we checked, so confirm how your report shows sales.

Should I include GST in the ROAS calculation? Your profit must be worked out after GST. For the ratio, use the same basis as your ad report. We could not confirm from public Amazon pages whether ad sales include GST, so test with one order and pick the matching basis in the calculator.

Can break-even ROAS be negative or infinite? If profit before ads is zero or negative, no ad spend can be profitable on that sale, so there is no break-even. The calculator says so instead of showing a number. Fix price, cost or fees first.

Why is my ROAS above break-even but I am still losing money? Common causes: returns higher than you allowed, fees or shipping missing from the input, a different GST basis, or ad sales that include units from a different, cheaper variant. Compare against your settlement report for one week.

Next step

If you would rather have someone set targets per product and watch them weekly, Blooprint manages marketplace ads and catalogue and listing optimisation for Indian brands. Its software, BlooprintAI, handles ads automation. Start by running your top five products through the calculator.