Break-Even ROAS Calculator
Find the minimum ROAS your store needs to stay profitable on Google, Meta and Amazon ads – and the target to aim for.
Below this, ads lose money on every order.
For your target profit after ad costs.
Left over before ads.
Most you can pay per order.
Cost per order at your target profit.
Of order value, before ads.
How break-even ROAS is calculated
ROAS (return on ad spend) is revenue divided by ad spend. A 3x ROAS means $3 of revenue for every $1 spent on ads. But revenue isn't profit: every order also carries product costs, shipping, payment fees and returns. Break-even ROAS is the point where the money left from an order exactly covers what you spent on ads to get it.
The calculator uses these formulas:
- Contribution per order = order value − product cost − shipping − payment fees − other costs − returns
- Break-even ROAS = order value ÷ contribution per order
- Target ROAS = order value ÷ (contribution per order − target profit per order)
- Break-even CPA = contribution per order
Worked example
| Item | Per order |
|---|---|
| Average order value | $80.00 |
| Product cost | −$28.00 |
| Shipping & fulfilment | −$8.00 |
| Payment fees (3%) | −$2.40 |
| Other costs | −$2.00 |
| Returns (5%) | −$4.00 |
| Contribution before ads | $35.60 |
| Break-even ROAS ($80 ÷ $35.60) | 2.25x |
| Target ROAS for 10% profit ($80 ÷ $27.60) | 2.90x |
In this example, a campaign reporting a 2.5x ROAS looks healthy, but it is only just above break-even and well below the 2.9x needed for a 10% profit.
How to use your break-even ROAS
- Set Smart Bidding targets. Use your target ROAS in Google Shopping, Performance Max and Meta value-based bidding. See our Performance Max for e-commerce guide.
- Calculate by margin tier. High- and low-margin products have different break-even points. Group them with custom labels and give each group its own target.
- Check blended results. Compare total revenue to total ad spend (MER) against your break-even ROAS to see whether your marketing is profitable overall.
- Factor in repeat purchases. If customers reorder, you may accept a first-order ROAS below break-even to acquire them – but only if you know your repeat rate and lifetime value.
Read more: Facebook & Instagram ads for e-commerce · Google Shopping feed optimization.
What is break-even ROAS?
Break-even ROAS is the return on ad spend at which your advertising neither makes nor loses money on an order. Below it, every sale from ads loses money after product, shipping, payment and return costs. It equals your average order value divided by your contribution margin per order before advertising.
What is a good ROAS for e-commerce?
There is no universal good ROAS. A store with 70% margins can be very profitable at a 2x ROAS, while a store with 25% margins loses money below 4x. Calculate your break-even ROAS first, then set a target above it that delivers the profit you want.
Should I use ROAS or MER?
Use both. Platform ROAS tells you how each campaign performs according to that ad platform. MER (marketing efficiency ratio: total revenue divided by total ad spend) shows whether your marketing is profitable overall, regardless of how platforms split the credit.
Should break-even ROAS include returns and shipping?
Yes. Returns, shipping, payment processing and packaging all reduce the money left to pay for advertising. Leaving them out makes your break-even ROAS look lower than it really is.
Is break-even ROAS the same for every product?
No. It depends on each product's margin, so high-margin and low-margin products have different break-even points. That is why we group products by margin tier and set separate ROAS targets in Google Shopping and Performance Max.
Want help hitting your target ROAS?
Book a free consultation and we'll review your Google, Meta or Amazon ads against your real break-even numbers.
- Meta Ads
- Google Ads
- Amazon Ads
- Bing Ads
Book a free consultation
Tell us about your goals and one of our team members will be in touch shortly.