Free tool · by Seif Gomaa
COD break-even calculator.
The ROAS in Ads Manager counts an order the moment it is placed. You get paid when it is delivered. This calculator gives you the most you can pay to acquire each placed order after cost of goods, shipping, collection fees and the orders that never arrive.
Market and currency
Assumes a refused order costs you the outbound leg with no revenue. If your courier bills the return leg too, double the shipping figure.
Result
Max cost per placed order
EGP 393
Reported ROAS needed to break even
2.55x
Contribution per delivered order
EGP 550
Shipping lost on refused orders
EGP 20
These numbers work. Any acquisition cost below this is profit.
The formula
The whole calculation, step by step.
- 01Contribution per delivered order = selling price, minus cost of goods, minus shipping, minus the collection fee.
- 02Lost shipping = shipping cost multiplied by the share of orders refused. A refused order does not come back at zero, it comes back negative.
- 03Profit per placed order = contribution multiplied by the delivery rate, minus the lost shipping. This is your acquisition ceiling.
- 04Break-even ROAS = selling price divided by the profit per placed order. Anything below it is a loss, however happy Ads Manager looks.
With the calculator's default figures — a product at 1,000, costing 350, 80 shipping, a 2% collection fee and a 75% delivery rate — the acquisition ceiling comes out around 393 and the break-even ROAS at about 2.55.
FAQ
Questions about the calculation itself.
How do I calculate break-even on cash on delivery?
Subtract cost of goods, shipping and the collection fee from the selling price to get the contribution per delivered order. Multiply that by your delivery rate, then subtract the shipping lost on refused orders. The result is the most you can pay to acquire each placed order.
Why per placed order rather than per delivered order?
Because the ad platforms count an order at the moment it is placed on the site. For your ceiling to be comparable with the figure in Ads Manager, it has to be on the same basis.
What does a refused order cost?
The full outbound leg with no revenue, and under many courier contracts the return leg as well. If you are billed for both, double the shipping figure in the calculator.
What is a normal delivery rate?
In Egypt, between 60% and 85% depending on category, price point and the quality of the creative, with around 75% being common. In the Gulf it runs higher, between 85% and 90%. A product consistently below 60% needs to be stopped rather than improved.
