Free tool · Ecommerce metrics
Break-even ROAS calculator: the minimum ROAS your ads need to make money
Use this break-even ROAS calculator to find the lowest return on ad spend at which your store stops losing money on each order. Enter your numbers and you'll see your break-even ROAS, the most you can pay in ads per order and the ROAS you need for a real profit.
Break-even ROAS
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Max ad cost per order
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Margin before ads
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ROAS for your profit goal
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Where the money from one order goes
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What is break-even ROAS?
Break-even ROAS is the return on ad spend at which the profit from an order exactly pays for the ads that brought it in. At that point you make zero: below it every sale costs you money, above it you start to earn.
It's different for every store, because it depends on your margin. A brand with a 70% margin before ads can live with a ROAS of 1.5. A brand with a 30% margin needs more than 3 just to stay even.
The break-even ROAS formula
Break-even ROAS = average order value ÷ profit per order before ads
Profit per order before ads = order value − product cost − shipping − payment fees − other costs
If you think in percentages it's even shorter: break-even ROAS is 1 ÷ your margin before ads. With a 40% margin, 1 ÷ 0.40 = 2.5.
A worked example
These are round example numbers, the same ones the calculator starts with.
| Per order | |
|---|---|
| Average order value | $60.00 |
| Product cost | −$18.00 |
| Shipping and fulfillment | −$7.00 |
| Payment fees (3%) | −$1.80 |
| Other costs | −$2.00 |
| Profit before ads (52%) | $31.20 |
| Break-even ROAS | 60 ÷ 31.20 = 1.92 |
Now look at what Meta tells you. At a ROAS of 2.5 each order costs $24 in ads (60 ÷ 2.5) and leaves $7.20 of profit. At a ROAS of 1.8 the same order costs $33.33 in ads and you lose $2.13 on every sale, even if the dashboard still looks positive.
Break-even ROAS vs target ROAS vs MER
- Break-even ROAS is the floor: zero profit, zero loss.
- Target ROAS is break-even plus the profit you want. In the example, a 10% profit per order needs a ROAS of 2.38. Google Ads also uses the name for a bidding strategy, where you tell the system the ROAS to aim for.
- MER is total revenue divided by total marketing spend. It's the check on what each platform reports, and the number I use to set budgets, as I explain in the 6 numbers to check before you scale ads.
One caveat: this calculator works per order and only counts the costs that grow with sales. Rent, salaries, app subscriptions and other fixed costs are left out. To know whether the whole business breaks even you need one more step: the break-even MER, which puts together margin, total marketing spend and the month's fixed costs.
What is a good ROAS for ecommerce?
There's no universal good ROAS. A 3 can be great for one store and a slow bleed for another. The only good ROAS is one comfortably above your break-even, measured on numbers you trust.
Leave a buffer. Meta and Google attribute sales with their own rules, so their ROAS rarely matches what your store records. If you're only a little above break-even on the platform, you may already be below it in reality.
How to lower it
- Raise the AOV. Bundles, gift boxes and free-shipping thresholds spread the fixed costs of an order. The Black Friday plan has examples that protect margin.
- Cut cost per order. Shipping, packaging and payment fees are small numbers that move break-even a lot.
- Check your prices. A small price increase on a product people love often does more than any campaign change.
- Count repeat purchases. If customers come back, you can accept a higher first-order break-even. That only works if you know your LTV, like a subscription brand such as Gastona.
If your ROAS sits close to break-even and you don't know why, that's the first thing I look at as an ecommerce consultant and Meta Ads consultant.
FAQ
Break-even ROAS: frequently asked questions
How do you calculate break-even ROAS?
Divide your average order value by the profit one order leaves before ads. If an order is worth $60 and leaves $30 after product, shipping and fees, your break-even ROAS is 60 ÷ 30 = 2.
What is a good break-even ROAS?
The lower, the more room your ads have. It depends only on your margin before ads: with a 60% margin it's 1.67, with a 25% margin it's 4. A high break-even ROAS is a pricing and cost problem, not an ads problem.
Should I include sales tax in the calculation?
No. Use the order value before sales tax and your costs without tax. If your ad platform records revenue including tax, compare like with like.
Is break-even ROAS the same as break-even CPA?
They are two sides of the same number. Break-even CPA is the most you can pay in ads for one order; break-even ROAS is your average order value divided by that amount.
Does this calculator save my numbers?
No. Everything runs in your browser. Nothing you type is sent or stored.
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