Unit Economics Calculator
What each order really earns after discounts, returns, shipping, fees and ads.
Where each ₹100 of net revenue goes
Per order, line by line
How this was calculated
Results are estimates for general information and planning, not financial advice. Banks and institutions may calculate differently (rounding, fees, rate changes). Confirm figures with your lender or a qualified adviser before deciding.
About the Unit Economics Calculator
Unit economics answers one question: does each order make money once everything it costs has been paid? Enter the average order value, discounts, product cost, packaging, shipping, payment fees, returns and the marketing cost per order, and the calculator works out the three contribution margins D2C brands track — CM1 after the product cost, CM2 after fulfilment and CM3 after marketing — with the break-even CPA, the break-even ROAS and the profit at the monthly order volume you plan for.
Returns are spread over every order as an expected value: the refund, the returned stock you cannot sell again and the reverse shipping. The order value can include GST or VAT; the tax is taken out first, because tax collected is not revenue.
How to use it
- Enter the average order value before discounts and the average discount. Tick Order value includes GST or VAT if it does, and enter the rate.
- Enter the costs of one order: the product cost (what the goods cost you, landed), packaging, shipping, the payment fee (% and fixed) and other variable costs such as warehousing or pick and pack.
- Enter the return or RTO rate, the cost of shipping a return back and the share of returned stock you can sell again.
- Enter your marketing cost per order — ad spend divided by orders — or 0 to see the break-even CPA on its own.
- Optionally enter orders per month and fixed costs per month for the monthly profit and the break-even volume.
Examples
Net revenue ₹810 · CM1 ₹534 (65.9%) · CM2 ₹394.76 (48.7%) With ₹250 of marketing per order: CM3 ₹144.76 (17.9%)
Break-even CPA ₹394.76 · break-even ROAS 2.05 on net revenue 2.69 on the order value with GST, before returns
2,000 × ₹144.76 − ₹2,00,000 = ₹89,520 profit a month Break-even at 1,382 orders a month
CM1, CM2 and CM3
- Net revenue = order value − discounts − GST or VAT − refunds of returned orders.
- CM1 = net revenue − product cost. It shows whether the product itself is priced well.
- CM2 = CM1 − packaging, shipping, return shipping, payment fees and other costs that come with each order: what an order contributes before marketing.
- CM3 = CM2 − marketing cost per order: what is left to pay salaries, rent and other fixed costs.
Brands draw the lines between CM1, CM2 and CM3 in slightly different places — some count payment fees or warehousing in CM1 — so compare like with like. Taking the costs that grow with each sale off the price, and keeping fixed costs apart, is the contribution-margin analysis behind pricing for profit in Nagle, Müller and Gijsbrechts’ The Strategy and Tactics of Pricing.
Break-even CPA and ROAS
The most you can pay to win an order without losing money on it is its CM2: that is the break-even CPA. In return-on-ad-spend terms the break-even ROAS is net revenue ÷ CM2, which is 1 ÷ the CM2 margin: with a 48.7% CM2 margin every ₹1 of ads has to bring in ₹2.05 of net revenue.
If your ad platform counts the order total with tax and before returns, compare its ROAS with the second break-even figure, which is worked out on that basis. For campaign figures use the ROAS calculator.
How returns are counted
A returned or undelivered order is refunded, but what it cost to send does not come back. Per order placed, the calculator takes off the refund (net order value × return rate), the product cost of returned stock you cannot sell again (product cost × return rate × the share you cannot resell) and the reverse shipping (return rate × return shipping), and it keeps the outbound shipping, packaging and payment fee of every order. In the example each extra percentage point of returns costs ₹7.40 per order.
Monthly profit and break-even volume
Fixed costs — salaries, rent, software — do not grow with each order, so they stay out of CM3. Profit per month = orders × CM3 − fixed costs, and the break-even volume is fixed costs ÷ CM3, rounded up to a whole order. Selling on a marketplace, the marketplace fee calculator works out the commission and fees per order to enter here.
Limitations
- All figures are averages per order: a mix of products, discounts and channels can hide orders that lose money, so work out the important ones separately.
- Payment fees are charged on every order, returned ones included. Add COD fees, chargebacks or marketplace commissions under other variable costs.
- Tax is simplified to one rate on the whole order, and input tax on your costs is assumed to be recoverable — enter costs without it.
Privacy
Everything happens in your browser. What you enter or open here is not uploaded or stored by MySmartCoPilot.
Frequently asked questions
What is the difference between CM1, CM2 and CM3?
CM1 is net revenue minus the product cost; CM2 also takes off fulfilment — packaging, shipping, returns and payment fees; CM3 also takes off marketing. CM3 is what each order leaves to cover fixed costs.
How do I calculate break-even ROAS?
Divide 1 by your contribution margin before marketing (CM2 as a share of net revenue). With a 40% CM2 margin the break-even ROAS is 1 ÷ 0.40 = 2.5: every ₹1 of ads must bring in ₹2.50 of net revenue.
What is a break-even CPA?
The highest cost per acquisition — ad spend per order — at which an order still pays for itself. It equals CM2 per order; above it each extra order loses money.
Should the order value include GST?
Enter the order value the way you know it and tick the GST or VAT box if it includes tax. The tax is taken out before any margin is worked out, because it is paid on to the government.
Does it work for repeat customers?
It works per order. If customers come back without new ad spend, enter the blended marketing cost per order across new and repeat orders — or work out first orders and repeat orders separately.