Break-Even ROAS Calculator
Start with your per-order costs to find the return needed to cover advertising. Then allow room for your desired profit margin.
Your break-even return
Results appear when JavaScript is enabled.
- Contribution profit per order before ads
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- Contribution margin
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- Break-even CPA (ad cost per order)
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- Target ROAS
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Contribution = price − COGS − shipping − (price × fee %) − fixed fee − other variable costs
Contribution margin = contribution ÷ price × 100
Break-even ROAS = 1 ÷ contribution margin as a decimal; break-even CPA = contribution per order
Target ROAS = 1 ÷ (contribution margin − desired margin), both as decimals
These thresholds cover entered variable costs and advertising only. Fixed overhead, taxes, and omitted costs can change profitability. Displayed values are rounded; calculations are not.
Contribution margin reference
| Margin | ROAS ratio | ROAS % |
|---|---|---|
| Enable JavaScript to compute the reference rows. | ||
How to calculate break-even ROAS
Break-even ROAS is the revenue per unit of ad spend needed for contribution before advertising to exactly cover advertising costs.
Subtract all per-order variable costs from selling price to get contribution profit. Divide that contribution by price to get contribution margin as a decimal, then divide 1 by that margin.
Contribution = price − product cost − shipping − percentage fee − fixed fee − other variable costs
Contribution margin = contribution ÷ price
Break-even ROAS = 1 ÷ contribution margin
Break-even CPA = contribution per order
For an illustrative order priced at 100 with 40 in product cost, 10 in shipping, a 3% processing fee, no fixed fee, and 5 in other costs, contribution is 42 and margin is 42%. Break-even ROAS is 1 ÷ 0.42, approximately 2.38×, and break-even CPA is 42. These are examples, not recommended targets.
Break-even ROAS vs target ROAS
Break-even leaves zero contribution after ads under the entered cost model. Target ROAS reserves a desired share of revenue after those costs and advertising.
Target ROAS = 1 ÷ (contribution margin − desired profit margin)
Both margins use revenue as their denominator. At 42% contribution margin and 10% desired margin, target ROAS is 1 ÷ (0.42 − 0.10) = 3.125×. A desired margin equal to contribution margin permits no positive ad spend; a higher desired margin is unattainable under these assumptions.
Compare this threshold with your actual return in the ROAS Calculator, using attributed revenue and ad spend from the same period.
Why margins change the answer
A lower contribution margin leaves less revenue available for advertising, so it requires a higher ROAS to break even. Shipping, discounts, payment fees, product mix, and returns can change that margin even when reported revenue ROAS stays the same.
Use consistent net revenue and representative costs for the orders attributed to your ads. Avoid double-counting costs. This per-order model assumes those costs scale with orders; it does not automatically include overhead or customer lifetime value.
Frequently asked questions
What is break-even ROAS?
Break-even ROAS is the revenue-to-ad-spend ratio at which contribution before ads exactly covers ad spend. It equals 1 divided by contribution margin as a decimal and excludes costs not entered here.
Which costs should I include?
Include product cost, shipping and fulfillment, processing fees, and other variable costs per order. Use net selling revenue consistently for discounts and returns; do not count the same cost twice. Fixed overhead is not included automatically.
How is break-even CPA calculated?
Break-even CPA equals contribution profit per order before advertising. With 40 remaining from each order, 40 is the maximum ad cost per order under this model; CPA here means cost per acquired order, not per customer across repeat purchases.
Why is my target ROAS unavailable?
Target ROAS is unavailable when desired profit margin is at least contribution margin, or inputs are invalid. Equal margins leave no room for positive ad spend; a higher desired margin cannot be reached under this model even without ads.
Can I break even with zero or negative contribution?
No finite ROAS can cover positive ad spend when contribution is zero or negative. Zero contribution allows only zero ad cost per order; negative contribution means each order loses money before advertising.