About this tool
The Break-Even ROAS Calculator works out the lowest return on ad spend at which a sale pays for its own advertising once the cost of goods, shipping, payment fees, and other per-order costs are covered, and optionally a target profit margin on top. It is for e-commerce operators setting a ROAS floor in Google, Meta, or Amazon campaigns, for anyone who has been told to hit a ROAS of 4 and wants to know whether that number has any basis, and for planners who need a maximum cost per acquisition to hand to a media buyer. Enter your average order value and cost percentages and the page returns the break-even ROAS, the maximum CPA, the contribution margin, and the profit each order earns at the ROAS you actually achieve. Flip the mode to solve for the margin a given ROAS requires. Two tables show how the break-even moves with the target margin and what each ROAS level means per order.
How it works
Contribution margin (CM) = 1 − cost of goods % − other variable costs %, the share of each order left to pay for ads and profit. Break-even ROAS = 1 ÷ (CM − target margin), because at break-even ad spend per order equals AOV × (CM − target) and ROAS = AOV ÷ ad spend. With 40% goods and 5% variable costs, CM = 55% and break-even ROAS = 1 ÷ 0.55 = 1.818; with a 10% target margin it is 1 ÷ 0.45 = 2.222. Maximum CPA = AOV × (CM − target). At any ROAS R, ad cost per order = AOV ÷ R, profit per order = AOV × CM − AOV ÷ R, and profit margin = CM − 1 ÷ R. In margin mode the page inverts the formula: required contribution margin = 1 ÷ ROAS + target. The currency symbol is display only.
Frequently asked questions
Why is break-even ROAS not just 1?
A ROAS of 1 means revenue equals ad spend, but revenue also has to pay for the goods sold, shipping, and payment fees. If those take 55% of every order, only 45% is left for ads, so ads can cost at most 45% of revenue and ROAS must be at least 1 ÷ 0.45 = 2.22 before the order stops losing money. Break-even ROAS is 1 only when every cost other than advertising is zero.
Should I include fixed costs like rent and salaries?
Not in the break-even ROAS itself, which is a per-order contribution measure: it tells you whether one more sale adds or destroys cash. Fixed costs are covered by the total contribution across all orders. If you want ads to fund overheads and profit as well, set a target margin equal to the share of revenue those need; the break-even ROAS then rises accordingly.
How does break-even ROAS relate to maximum CPA?
They are the same constraint in different units. Maximum CPA = AOV × (contribution margin − target margin) is the most you can spend to acquire one order, and break-even ROAS = AOV ÷ maximum CPA. At an 80 order value with 55% contribution margin the maximum CPA is 44 and the break-even ROAS is 80 ÷ 44 = 1.82. Use whichever your ad platform lets you bid on.
My ROAS is above break-even but I am not making money. Why?
Three common reasons. Attributed revenue overstates what the ads actually caused, so the real ROAS is lower. Returns, discounts, and chargebacks reduce revenue after the platform has counted it. And the contribution margin used here ignores fixed costs, so a business can be contribution-positive on every order and still not cover its overheads; set a target margin to see the ROAS that would.