🛒 E-Commerce Tools
Break-Even ROAS Calculator
Find the minimum Return on Ad Spend you need before your ads are profitable. Stop guessing your targets.
Your numbers
Variable costs
These reduce your gross margin before ad spend
Enter your order value and product costs to find your break-even ROAS.
What is break-even ROAS?
The formula
Break-Even ROAS = 1 ÷ Gross Margin %
If your gross margin is 40%, your break-even ROAS is 1 ÷ 0.4 = 2.5x
Why it matters
Your ad platform reports ROAS as revenue ÷ ad spend. If your target is below break-even, every sale made from ads costs you money.
Frequently Asked Questions
What is break-even ROAS?
The return on ad spend where a sale makes exactly zero profit: 1 ÷ contribution margin. At a 40% margin after product, shipping, and fees, break-even ROAS is 2.5 — anything below that loses money on every conversion.
Why is my ad platform's ROAS misleading?
Platforms report revenue ROAS, ignoring your costs. A "profitable" 3.0 ROAS still loses money if your margin needs 3.5 to break even. Always compare platform ROAS to your break-even, not to zero.
What target ROAS should I set above break-even?
Common practice is 1.3–1.5× break-even to fund overhead and profit — e.g., break-even 2.5 → target 3.3–3.8. New-customer campaigns can run closer to break-even if repeat purchase rates justify it.
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