Unit Economics
Revenue is vanity. This calculator shows what your D2C brand actually keeps after COGS, shipping, ads, and returns.
Most D2C brands track revenue and ROAS. Almost none track contribution margin after all variable costs. This is the number that determines whether scaling spend makes you more money or just more revenue. Enter your numbers to find out where you actually stand.
Revenue
Average Order Value / AOV (₹)
Total amount the customer pays. If you offer free shipping, this is just the product price.
Monthly Orders
Total orders shipped per month
Variable costs per order
Product Cost / COGS (₹)
Manufacturing or sourcing cost only. Do not include packaging or shipping here if entering them separately below.
Courier / Shipping Cost (₹)
What you pay the courier per order
Payment Gateway Fee (%)
Razorpay / Cashfree is typically 2%. Applied on AOV.
Packaging / Other Variable Costs (₹)
Boxes, inserts, labels. Enter 0 if already included in COGS above.
Paid acquisition
Monthly Ad Spend (₹)
Total Meta + Google spend per month
COD and RTO — leave blank if prepaid only
COD Order Mix (%)
What % of your orders are cash on delivery
RTO Rate on COD Orders (%)
What % of COD orders are returned / not delivered
Return Shipping Cost (₹)
Cost per rejected order coming back
Worked Example
A home decor brand doing 300 orders a month at ₹1,500 AOV. COGS ₹450, shipping ₹130, 2% gateway fee (₹30), packaging ₹35. Monthly ad spend ₹1,20,000. 40% COD mix with 30% RTO rate and ₹110 return shipping.
Monthly revenue = ₹1,500 × 300 = ₹4,50,000
Contribution per order = ₹1,500 − ₹450 − ₹130 − ₹30 − ₹35 = ₹855
RTO orders = 300 × 40% × 30% = 36 orders
RTO loss = 36 × (₹130 + ₹110) = ₹8,640/month
Gross contribution (before ads) = (300 × ₹855) − ₹8,640 = ₹2,48,010
Contribution after ads = ₹2,48,010 − ₹1,20,000 = ₹1,28,010
Margin after ads = ₹1,28,010 ÷ ₹4,50,000 = 28.4%
Revenue looks healthy at ₹4.5L. But after RTO losses eat ₹8,640 and ads take ₹1.2L, the brand keeps ₹1.28L — a 28% margin before fixed costs like salaries, rent, and software.
Common Questions
What is contribution margin and why does it matter more than revenue?
Contribution margin is what you keep after all variable costs — COGS, shipping, payment fees, and returns. Revenue tells you how much was sold. Contribution margin tells you whether selling more makes you money or just generates more activity. Most D2C brands that "scale" and then run out of cash were tracking revenue instead of contribution margin.
What is a healthy contribution margin for a D2C brand?
After ads, a contribution margin above 25% gives you real room to cover fixed costs and invest in growth. Below 15% and you are running thin — one bad RTO month or a CAC spike will put you negative. The target margin before ads (gross contribution) should be at least 50% to leave room for paid acquisition costs and still remain profitable.
How do I calculate the break-even number of orders?
Break-even orders = monthly ad spend divided by contribution margin per delivered order. If you spend ₹1,20,000 on ads and your contribution per delivered order (after RTO losses) is ₹600, you need 200 orders to cover the ad spend before the business makes anything. This calculator gives you that number automatically.
This calculator does not include my fixed costs. Should it?
No, and intentionally. Contribution margin only covers variable costs — the costs that change with each order. Fixed costs like salaries, rent, and software exist regardless of order volume. The contribution margin this calculator shows is what you have left to cover those fixed costs. If your contribution margin is ₹1.5L and your fixed costs are ₹1.2L, you are making ₹30K. If it is ₹80K, you are losing ₹40K.