About the Break-Even ROAS Calculator
This break-even ROAS calculator tells you the lowest return on ad spend your campaigns can have before they start losing money. Enter your selling price, product cost, shipping, payment or marketplace fees and any other per-order costs, and it calculates the contribution margin left to spend on advertising, the break-even ROAS and ACoS, and the maximum cost per acquisition you can afford.
It is designed for Shopify and Amazon sellers, DTC brands and media buyers setting targets in Google Ads, Meta or TikTok. Add a target profit margin and you also get the target ROAS and CPA that keep that profit after ad costs — the number to put into a tROAS or tCPA bid strategy.
The calculation is per order and assumes one purchase per acquired customer. If customers reorder, you can justify a lower first-order ROAS; use a lifetime value calculator for that decision.
With the default inputs, the break-even roas is 1.86 x. Change any value above to recalculate instantly.
How to use the break-even roas calculator
- 1Enter the selling price or average order value.
- 2Add product cost, shipping and fulfilment per order.
- 3Enter payment or marketplace fees as a percentage of price, plus any other per-order costs.
- 4Read your break-even ROAS, ACoS and maximum CPA.
- 5Set a target profit margin to get the ROAS or CPA to use as your bidding target.
Formula and method
First the calculator works out the contribution per order: the selling price minus product cost, shipping, percentage-based fees and other per-order costs. That is the most you can spend to win the order and still break even, so it equals the maximum CPA. Dividing price by contribution gives the break-even ROAS, and contribution ÷ price is the break-even ACoS.
For a target profit margin, the target profit (price × target %) is set aside first. What remains is the target CPA, and price ÷ target CPA is the target ROAS. If the target margin is larger than the margin before ads, no amount of ad efficiency can reach it.
- Price
- Revenue per order (use average order value for multi-item orders)
- COGS
- Cost of the goods in the order
- Fees
- Payment processing or marketplace fees (price × fee %)
- Contribution
- Profit per order before advertising
Worked examples
$60 product with $18 COGS
Fees are 3% of $60 = $1.80, so $60 − $18 − $6 − $1.80 − $2 leaves $32.20 per order. Break-even ROAS is $60 ÷ $32.20 ≈ 1.86x and you can pay up to $32.20 per sale. Keeping a 15% ($9) profit leaves $23.20 for ads, a target ROAS of about 2.59x.
Amazon seller with a 15% referral fee
A 15% referral fee on $35 is $5.25, so after $8 product cost and $7.50 FBA fulfilment $14.25 remains. Break-even ACoS is 40.7% (ROAS 2.46x). To keep a 10% profit you need ACoS below about 30.7%, i.e. ROAS of 3.26x.
Low-margin product
Only $6.25 of a $25 order is left before ads, so the campaign needs a 4x ROAS just to break even and 6.67x to keep a 10% margin. Products like this usually need bundles or a higher price before paid ads make sense.
Frequently asked questions
How do I calculate break-even ROAS?+
Divide the selling price by the profit per order before advertising. If a $100 product leaves $40 after product, shipping and fees, break-even ROAS is 100 ÷ 40 = 2.5x. Equivalently, break-even ROAS is 1 ÷ your margin before ads.
What is break-even ACoS?+
Break-even ACoS is your profit margin before advertising, expressed as a percentage of price. If ad spend as a share of sales (ACoS) stays below this, the ads are profitable; above it, each sale loses money.
What is the difference between break-even ROAS and target ROAS?+
Break-even ROAS is the point where ad-driven sales make zero profit. Target ROAS adds a profit goal on top, so it is always higher. Use target ROAS in Google or Meta bidding and break-even ROAS as the floor for pausing campaigns.
Can I run ads below break-even ROAS?+
Sometimes. If customers reliably buy again, the first order can be a loss that lifetime value recovers. Brands also accept low ROAS for launches or retargeting tests, but it should be a deliberate, measured decision.
Should I include shipping and fees?+
Yes. Every cost that scales with each order — product, packaging, shipping, card or marketplace fees, return allowances — reduces what you can spend on ads. Leaving them out makes break-even ROAS look lower than it really is.