What Is Break-Even ROAS?

Break-even ROAS is the minimum Return on Ad Spend required to cover all variable costs associated with a sale, excluding ad spend itself.

How do you calculate Break-Even ROAS?

The formula is 1 divided by your Contribution Margin percentage. Contribution Margin is (Revenue - Variable Costs) / Revenue.

Why is Break-Even ROAS different from Target ROAS?

Break-Even ROAS is the point where you make $0 profit. Target ROAS is higher because it includes your desired profit margin on top of costs.

Break-Even ROAS Calculator

Stop guessing your profitability. Calculate the exact ROAS you need to cover your costs and start making real money.

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Enter Your Metrics

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Average Order Value (AOV)

Total Costs (COGS + Shipping + Fees)

Include product cost, shipping, packaging, and payment fees.

You Break Even At:

Target ROAS

Profit Margin

--%

Net Profit

$0.00

The Math

Why Costs Eat Your ROAS

A "successful" campaign with 2.0 ROAS often loses money. Why? Because ROAS only looks at Revenue vs. Ad Spend. It ignores the cost of the product itself.

Once you factor in COGS, shipping, and fees, the "Break-Even" point is much higher than you think. Use this visual guide to understand where your money goes.

Where Does $100 Revenue Go?

COGS (30%)

-$30

Shipping (15%)

-$15

Fees (5%)

-$5

Left for Ad Spend

$50 Remaining

If you spend more than $50 on Ads to get this sale (ROAS < 2.0), you lose money.

Who Needs This Tool?

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eCommerce Owners

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Media Buyers

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CFOs & Finance

Audit marketing efficiency and cash flow.

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Dropshippers

Calculate slender margins quickly.

Frequently Asked Questions

What happens if my ROAS is below break-even? expand_more

If your ROAS is lower than your break-even point, you are losing money on every sale. You are essentially paying the customer to buy from you. You need to either increase your Average Order Value (AOV), lower your COGS, or improve your ad performance.

Does this include agency fees? expand_more

Typically, Break-Even ROAS refers to the direct costs of the product (COGS, Shipping, etc.). Agency fees or fixed monthly retainers are usually considered "overhead." However, you can add a per-unit estimated cost to your "Total Costs" field if you want to be extremely conservative.

How do I lower my Break-Even ROAS? expand_more

To lower the requirement (make it easier to be profitable), you need to increase your margins. You can do this by:

Raising prices (increasing AOV).
Bundling products to increase order size.
Negotiating lower product costs (COGS).
Reducing shipping costs.

Need Higher Profitability?

Knowing your numbers is step one. Scaling them is step two. Our team specializes in high-ROAS performance marketing.

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