Break-Even ROAS Calculator
Find the minimum ROAS you need to stop losing money on ads.
How to Use This Break-Even ROAS Calculator
- Enter your average order value (AOV). Usually the total revenue divided by number of orders.
- Enter your product cost (COGS) per order. The cost to buy or manufacture the item.
- Add variable costs. Toggle "Extra Costs" to include shipping, fees, and taxes.
- Review your metrics. Instantly see your break-even ROAS, break-even CPA, and gross margin.
- Save scenarios. Use the "Save Current Scenario" button to compare different pricing models or cost structures.
What Is Break-Even ROAS (and Why It Matters)?
Break-even ROAS (Return on Ad Spend) is the exact ROAS multiplier where your advertising campaign neither makes a profit nor a loss. It is the "tipping point" for your profitability.
- If your actual ROAS is lower than this number, you are losing money on every sale.
- If your actual ROAS is higher than this number, you are generating profit.
Break-Even ROAS vs ROAS vs ROI
| Metric | Definition | Focus |
|---|---|---|
| ROAS | Revenue ÷ Ad Spend | Ad Efficiency |
| Break-Even ROAS | The ROAS where profit is zero | Safety Line / Minimum Target |
| ROI | (Profit ÷ Cost) × 100 | Total Business Return |
Break-Even ROAS Formula (With Example)
Formula A (Simple)
This is the fastest method. If your margin is 50% (0.5), your break-even ROAS is 1 ÷ 0.5 = 2.0.
Formula B (Detailed)
Useful if you haven't calculated margin percentage yet.
Step-by-Step Example
Price (AOV) = $50
COGS + Fees = $30
Gross Profit = $50 - $30 = $20
Gross Margin = $20 / $50 = 40% (0.4)
With a 40% gross margin, your calculation is:
This means for every $100 you spend on ads, you must generate $250 in revenue just to cover your product costs and fees.
What Costs Should You Include?
Product Costs (COGS)
The direct cost to manufacture or purchase the item. This is usually your biggest expense.
Shipping & Fulfillment
Packaging materials, shipping labels, and warehouse pick/pack fees. Add these to "Other variable costs".
Platform & Payment Fees
Transaction fees (e.g. Stripe 2.9% + 30¢) and marketplace commissions (e.g. Amazon 15% referral fee).
Tax / VAT
In regions like the EU/UK, VAT is included in the display price. You must subtract the tax portion to see real revenue.
What about Fixed Costs (Overhead)?
Salaries, software subscriptions, and rent are typically excluded from the variable per-unit break-even calculation. Instead, aim for a Target ROAS higher than your Break-Even ROAS to generate enough gross profit to cover these fixed expenses.
Break-Even ROAS for Different Platforms
Facebook & Instagram Ads
Impulse buy platforms often have lower conversion rates than search. AOV bundles are key here to lower your required Break-Even ROAS.
Google Ads (Shopping & Search)
High intent traffic. CPCs are expensive, so your margin needs to support higher acquisition costs. High break-even points are risky here.
TikTok Ads
Younger demographic, lower AOV is common. You might need to accept a lower initial ROAS and rely on Lifetime Value (LTV).
Amazon FBA & PPC
Referral fees (15%) and FBA fees chew up margin fast. Your Break-Even ROAS is often much higher (e.g. 4.0x+) due to these costs.
How to Use Break-Even ROAS in Your Ad Strategy
Set Your Minimum Floor
Treat your Break-Even ROAS as your absolute "floor". If a campaign falls below this number for a sustained period (and isn't contributing to lifetime value), it is actively draining your bank account. Pause or restructure these immediately.
Adjust Bids and Budgets
Scaling: If your campaign ROAS is significantly higher than your break-even (e.g. Actual 4.0 vs Break-Even 2.5), you have room to scale spend aggressively.
Consolidating: If you are hovering near break-even, focus on optimizing your creatives or landing page conversion rate before increasing budget.
Compare Products and Offers
Use this calculator to test different bundles. A higher priced bundle usually has a lower Break-Even ROAS threshold because the fixed shipping cost is a smaller percentage of the total order value.
Common Mistakes When Calculating ROAS
Forgetting hidden fees
Ignoring the 3-5% payment processing fee or shipping subsidies usually results in an overly optimistic break-even point.
Mixing up Gross vs Net Margin
Break-even ROAS focuses on Unit Economics (Gross Margin). Do not try to deduct your rent or salary from a single unit calculation, or your required ROAS will be impossible to hit.
Ignoring Returns
If you have a 10% return rate, your real revenue is 10% lower. You should factor this into your average order value or costs.
Frequently Asked Questions
Who Built This Tool?
This Break-Even ROAS Calculator was built to help e-commerce sellers and media buyers stop guessing and start profiting. It was designed by experienced marketers who understand that profit > revenue.
🔒 Privacy Promise
This tool runs entirely in your browser. No data is sent to our servers. Your financial inputs (margins, costs) remain 100% private to you.