Free marketing calculator
Break-Even ROAS Calculator
Calculate the ROAS you need to cover product costs, fees, shipping, fulfillment, and your target profit margin before scaling paid ads.
Break-Even ROAS Calculator
Adjust the example values to see your break-even and target numbers update instantly.
Revenue from one average order.
The product cost for one order.
Outbound shipping cost per order.
Pick, pack, warehouse, or handling cost.
Payment fee as a percentage of order value.
Any other per-order variable cost.
Desired profit after ad spend as a percentage of revenue.
How the calculator works
Variable cost = product cost + shipping + fulfillment + payment processing fee + other variable cost.
Contribution profit = average order value - total variable cost.
Break-even ROAS = average order value / contribution profit.
Target ROAS = average order value / (contribution profit - target profit).
Guide
Understanding Break-Even ROAS
What is Break-Even ROAS?
Break-even ROAS is the minimum return on ad spend you need for an order to cover its variable costs and advertising cost. At break-even ROAS, the order produces zero profit after ads.
How to Calculate Break-Even ROAS
Start with average order value, subtract every variable cost per order, then divide average order value by the contribution profit left over. That contribution profit is the most you can spend on ads before the order stops being profitable.
Break-Even ROAS Formula
Contribution Profit = AOV - Variable Costs
Contribution Margin % = Contribution Profit / AOV x 100
Break-Even CPA = Contribution Profit
Break-Even ROAS = AOV / Break-Even CPA
Target CPA = Contribution Profit - Target Profit
Target ROAS = AOV / Target CPA
Example
If your average order value is $100 and your product, shipping, fulfillment, payment fee, and other variable costs total $52, your contribution profit is $48. Your break-even CPA is $48 and your break-even ROAS is 2.08x. If you want a 15% target profit margin, you reserve $15 profit, leaving a target CPA of $33 and a target ROAS of 3.03x.
Break-Even ROAS vs Target ROAS
Break-even ROAS tells you the floor: the minimum performance needed to avoid losing money. Target ROAS tells you the goal: the performance needed after protecting your desired profit margin. Most teams should optimize toward target ROAS, not just break-even ROAS.
Frequently Asked Questions
What is a good break-even ROAS?
A lower break-even ROAS is usually better because it means each order has more margin available for advertising. The right number depends on your costs, pricing, and profit goals.
Is break-even ROAS the same as target ROAS?
No. Break-even ROAS covers costs and ad spend with zero profit. Target ROAS includes the profit margin you want to keep after advertising.
Should I include shipping and payment fees?
Yes. Any cost that changes with each order should be included so your ROAS target reflects real contribution profit.
Can this calculator be used for services or digital products?
Yes. Use average order value as revenue and enter any per-sale costs such as platform fees, contractor costs, commissions, or delivery costs.