Ecommerce profit decision library
Break-Even ROAS Calculator
Find the ad return your unit economics must clear, then follow the exact revenue, cost, and platform workflow behind the threshold.
02 / Threshold
Above break-even
Every $1 in ad spend must generate at least $1.75 in revenue.
- Maximum CPA
- $45.60
- Contribution margin
- 57.0%
- Profit / order now
- $13.60
- Profit / $1k ad spend
- $425
Your current ROAS is 42.5% above the break-even line.
Set a profit targetWhat is break-even ROAS?
Break-even ROAS is the revenue-to-ad-spend ratio where your contribution profit exactly covers advertising cost. Above it, each order creates contribution profit. Below it, scaling ads scales the loss.
Worked example
A 40% margin needs 2.5x ROAS just to stand still.
The ad platform may report 2.2x as a strong return. Your ledger says it loses $4.55 on every $100 order before overhead.
Count what moves with an order
Your ROAS floor is only as honest as your cost inputs.
- 01Product cost
COGS, packaging, and landed inventory cost.
- 02Fulfillment
Pick, pack, shipping subsidy, and handling.
- 03Transaction fees
Payment processor and marketplace percentages.
- 04Returns and discounts
An expected allowance based on actual order history.
From metric to operating decision
Build the number from evidence you can audit.
Use the library when a platform field, margin definition, promotion, or customer-value window changes what belongs in the calculator.
Reconcile net sales, product cost, fulfillment, fees, and mature returns.
Calculate the target from contribution and the profit you intend to keep.
Keep bidding formats separate from the business break-even floor.
Use cumulative cohort contribution instead of revenue LTV.
See revenue, cost, attribution, rounding, and review boundaries.
Clear answers
Break-even ROAS FAQ
What is a good break-even ROAS?
Lower is generally more resilient because each revenue dollar leaves more room for ad spend. There is no universal target: a 1.5x floor may be healthy for a high-margin brand, while a 4x floor may be unavoidable in a thin-margin category.
What is the difference between break-even ROAS and target ROAS?
Break-even ROAS is the no-profit, no-loss floor. Target ROAS should sit above that floor to fund overhead, payroll, reinvestment, and the profit you expect the business to keep.
Does break-even ROAS include fixed overhead?
This calculator focuses on variable contribution economics. To build a target ROAS that covers fixed overhead, add your desired overhead allocation and profit per order to the contribution you need to retain.
Can I use this for lead generation?
Yes, if you translate expected customer value into revenue per acquired customer and include the variable costs of delivery. For a pure lead metric, maximum CPA is usually the more direct output.
Why does Meta or Google Ads ROAS differ from my profit?
Ad platforms compare attributed revenue with ad spend. They do not subtract product cost, fulfillment, payment fees, returns, or discounts, so reported ROAS can look healthy while contribution profit is negative.