Free tool · Meta Ads and Google Ads
Break-Even ROAS Calculator for ecommerce ads
Results
Break-even ROAS
1.92x
Below this, every sale from ads loses money. That is 192% in Google Ads terms.
costs $28.80 · left for ads and profit $31.20 per $60 order
Break-even CPA
$31.20
Most you can pay per purchase
Contribution margin
52.0%
Order value minus all variable costs
| If ROAS is | Ad cost / order | Profit / order |
|---|---|---|
| 1.44x | $41.60 | -$10.40 |
| 1.92x | $31.20 | $0.00 |
| 2.40x | $24.96 | $6.24 |
| 2.88x | $20.80 | $10.40 |
| 3.85x | $15.60 | $15.60 |
The idea
Why I start every ecommerce account here
When a store owner tells me their Facebook ads "are doing a 2x ROAS", my first question is always what it costs them to send out one order. Until I know that, a 2x tells me nothing. It can be a healthy account or one that loses money on every sale.
The ROAS calculator answers "how did this period do?" from total spend and revenue. This page answers the question before that one: per order, how much room is there for advertising at all? That is why it asks for order-level costs instead of a single margin figure.
The formulas
Profit per order before ads
Order value − product cost − shipping − fees − other per-order costs. This is also your break-even CPA: the ads can take all of it and you are back at zero.
Break-even ROAS
Order value ÷ profit per order. Same thing as 1 ÷ contribution margin. Higher costs mean a higher bar for the ads.
Target ROAS
Order value ÷ (profit per order − profit you want to keep). The ad cost per order you can afford shrinks, so the ROAS you need goes up.
A worked example
These are example numbers, the defaults in the calculator, not a client's figures. Say a skincare store sells a $60 bundle. The products cost $18, shipping and packing $7, card and Shopify fees about 3% ($1.80), and I set aside $2 per order for returns and apps.
Costs per order: 18 + 7 + 1.80 + 2 = $28.80. Left for ads and profit: 60 − 28.80 = $31.20. That is the break-even CPA. Break-even ROAS is 60 ÷ 31.20 = 1.92x.
Now the owner wants $9 profit per order (15% of the order value). The ads can take 31.20 − 9 = $22.20 per purchase, so the target ROAS is 60 ÷ 22.20 = 2.70x, or 270% in Google Ads. The table under the result shows the same story at a glance: at 1.44x every order loses money, at 2.88x each one leaves about $10.
How to fill it in properly
Use the average order, not the product price
If people often buy two items or use a discount code, take total revenue ÷ number of orders from your store admin for the last month or two.
Shipping is what you pay
If you charge $5 shipping but pay the courier $9, the order value already includes the $5, and $9 goes in the shipping field.
Don’t forget fees
Payment processing, marketplace commission and buy-now-pay-later fees are a percentage of the order. They are small on their own and easy to miss, but they move break-even ROAS more than people expect.
Leave fixed costs out
Rent, salaries and software you pay for anyway don't belong here. This is about the cost that comes with each extra order. Fixed costs are covered by the profit you set in the optional field.
Mistakes I see in ad accounts
- Using product markup as the margin. A product bought for $20 and sold for $40 is a 100% markup but a 50% margin, before shipping and fees.
- Judging the account by the platform's purchase value when refunds and cancelled orders aren't taken out.
- Setting the target ROAS equal to break-even and wondering why the business doesn't grow. Break-even means zero.
- One break-even figure for a store whose products have very different margins. Split them into campaigns or product sets and work each one out.
- Comparing Meta's and Google's ROAS without checking whether both claim the same sale.
When a ROAS under break-even can still be fine
If customers come back, the first order isn't the whole value. A coffee subscription or a skincare brand with refills can accept a first-order ROAS under break-even if repeat purchases are real and measured. The trap is assuming repeat sales that never show up, so I only do this with a few months of actual repeat data.
For lead-based businesses, such as a law firm or a med spa, the purchase happens offline, so think in cost per customer instead. The CPA and cost per lead calculator handles that, and the max CPC calculator turns it into a bid.
If you want help setting this up end to end, from tracking real purchases to feeding them back to the ad platforms, that is what my B2C performance marketing work covers. For search campaigns, see Google Ads management.
FAQ
Break-even ROAS questions
What is break-even ROAS?
The return on ad spend where an order pays for its own advertising and nothing is left over. Above it each sale makes money; below it each sale loses money, even though the ad platform shows revenue.
How do you calculate break-even ROAS?
Break-even ROAS = order value ÷ profit per order before ads. Profit per order is the order value minus product cost, shipping, payment fees and any other cost that comes with each order. With a $60 order and $28.80 of costs, $31.20 is left, so break-even ROAS is 60 ÷ 31.20 = 1.92x.
Is break-even ROAS the same as 1 ÷ margin?
Yes, as long as the margin is the contribution margin: what is left after every per-order cost, not just the product cost. Most people overstate their margin by forgetting shipping and fees, which makes the break-even ROAS look lower than it really is.
What is break-even CPA?
The most you can pay in ads for one purchase without losing money. It is simply the profit per order before ads. Break-even ROAS and break-even CPA are two views of the same line: order value ÷ break-even CPA gives you break-even ROAS.
What break-even ROAS should a dropshipping store use?
The one that comes out of your own numbers. Dropshipping often has a high product cost and slow, paid shipping, so the margin is thin and break-even ROAS tends to be high. Run the calculator with your real supplier price and shipping rather than borrowing someone else’s target.
Should I set my target ROAS at break-even?
No. Break-even is the floor, not the goal. Use the optional profit field to get a target ROAS that leaves the profit you want per order, then set the ad platform’s target a little below what campaigns already achieve and raise it in steps.
How do I enter the result in Google Ads or Meta?
Google Ads asks for target ROAS as a percentage, so 2.5x becomes 250%. Meta’s minimum ROAS bid control uses the plain number, so 2.5x is entered as 2.5. Cost per result goals in Meta use the break-even or target CPA instead.
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