Break-Even ROAS Calculator
Enter your contribution margin, or let the calculator work it out from price, product cost, fees and other per-order costs. You get the return on ad spend at which ads break even and the return you need for a target profit. Nothing is sent anywhere.
In one sentence: Break-even ROAS is the revenue each unit of ad spend must return so that the margin on that revenue exactly pays for the ads.
Formula: break-even ROAS = 1 ÷ contribution margin; target ROAS = 1 ÷ (contribution margin − target profit margin); contribution margin = (price − cost − fees − other costs) ÷ price.
Why 2x ROAS can still lose money
Ad platforms report return on ad spend as revenue divided by spend, and a 2x or 3x figure sounds healthy. But revenue is not profit. If 60% of each sale goes to product cost, fees and shipping, only 40% is left to pay for the ad, so you need 2.5x just to break even, and more to make anything. The break-even return is the reciprocal of your contribution margin; the lower the margin, the higher the return you need.
Getting the margin right
Use the contribution margin per order after everything that scales with the sale: product cost, platform and payment fees, packaging, and any shipping you absorb. The derive option computes it from those figures; the profit per order calculator gives the same number with more detail. Leave fixed overheads out, because they do not change when you sell one more unit, but remember the target profit has to cover them in aggregate.
Setting a target
The target profit field turns the break-even figure into a working target: a 10% profit after ads on a 40% margin needs 3.33x. Use that as the minimum acceptable return in campaign reports and when setting target-ROAS bidding. Campaigns above it can take more budget; campaigns below it are buying revenue at a loss, however impressive the sales graph. Repeat customers change the maths in your favour if you can measure them; the lifetime value calculator is the place to do that.
Frequently asked questions
Should ROAS use revenue with or without shipping charged?
Match the platform's reporting. If it counts shipping in conversion value, use margin on revenue including shipping.
Is this the same as break-even CPA?
Related. Break-even cost per acquisition is the contribution margin in money terms per order; the calculator shows it as a share of revenue.
Is my data stored?
No. Everything runs in your browser.