Break-even ROAS calculator
Your break-even ROAS (BEROAS) is the lowest return on ad spend where your ecommerce ads still pay for themselves. Enter your price and costs to find it, along with your break-even CPA.
Break-even ROAS = 1 ÷ margin, where margin = (price − costs) ÷ price
Your average order value works too.
What you pay, not what the customer pays.
Payment processing and platform fees.
Fill in the boxes and your result appears here, instantly.
How many different ads can your budget test?
Enter your budget to see how many distinct ads it can test.
How to use the break-even ROAS calculator
- 1Enter your average selling price.
- 2Enter your product cost, shipping cost and any payment or platform fees per order.
- 3Read your margin, your break-even ROAS and your break-even CPA.
- 4Compare it with the ROAS in your ad account. Anything above it is profit before overhead.
How break-even ROAS is calculated
First work out your margin per order: price minus product cost, shipping and fees, divided by price. Break-even ROAS is 1 divided by that margin.
If you sell at $60 and keep $24 after costs, your margin is 40 percent and your break-even ROAS is 2.5. Every dollar of ads must bring back at least $2.50 of revenue just to cover itself. Anything above that is margin you keep.
Break-even CPA: the same line in money
Break-even CPA is the most you can pay in ads to win one order and still break even. It is what is left of each order after product cost, shipping and fees: $24 in the example above.
It is often easier to check than ROAS. Hold it against the cost per purchase in Ads Manager. Below it, each sale makes money before overhead. Above it, each sale loses money.
Why this number matters more than a generic target
Advice like aim for a 4x ROAS ignores your margins. A 40 percent margin needs 2.5 to break even, while a 20 percent margin needs 5. The same ad can be a winner for one brand and a loss for another.
Knowing your line also tells you how aggressive you can be. If your break-even is low, you can afford to test widely and scale spend on ads that clear it. If it is high, you need stronger offers, higher prices or cheaper reach before more budget makes sense.
What this figure leaves out
Break-even ROAS covers the cost of each order only. It does not include rent, salaries, software, or returns beyond what you entered. If those matter to you, enter a higher cost to stay safe, or treat the result as the minimum, not the goal.
Repeat customers also change the picture. If many first buyers come back, you can accept a lower first-order ROAS. Use the calculator as a floor, then adjust for lifetime value.
Frequently asked questions
- What is break-even ROAS?
- It is the return on ad spend at which your ad revenue exactly covers your ad spend plus the cost of producing and delivering each order, so you neither make nor lose money.
- What is the break-even ROAS formula?
- Break-even ROAS equals 1 divided by your profit margin, where margin is price minus costs, divided by price.
- What does BEROAS mean?
- BEROAS is short for break-even ROAS: the return on ad spend at which an ecommerce brand's ads exactly pay for themselves after the cost of each order.
- What is break-even CPA?
- Break-even CPA is the most you can spend on ads to win one order without losing money. It equals your selling price minus product cost, shipping and fees per order.
- What costs should I include?
- Include product cost, packaging, shipping you pay, payment processing fees and any marketplace or platform fees. Add discounts if they apply to most orders.
- My ROAS is above break-even. Am I profitable?
- You are profitable on each order before overhead. Whether the business is profitable depends on fixed costs such as salaries and software.
- Should I use contribution margin or gross margin?
- Contribution margin, which also subtracts shipping and fees, is the safer choice. It reflects what you really keep from each order.
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