Break-Even ROAS Calculator
Calculate your break-even ROAS using product costs, shipping, transaction fees, taxes your business absorbs, and other variable costs.
Calculate Your Break-Even ROAS
Enter your selling price and non-ad variable costs. The calculator will show your break-even ROAS.
Break-Even ROAS
2.50x
Contribution Margin
40%
Maximum Ad Spend per Sale
$40.00
Total Variable Costs
$60.00
Contribution Amount
$40.00
$100.00 − $60.00 = $40.00 available for advertising
How to Use the Break-Even ROAS Calculator
- 1
Enter your selling price.
Use the actual revenue from one sale.
- 2
Enter your variable costs.
Include all non-ad costs tied to each sale, such as product cost, shipping, fulfillment, packaging, payment fees, and taxes or duties your business absorbs.
- 3
Calculate your break-even ROAS.
The Break-Even ROAS Calculator returns the minimum ROAS for the selling price and costs you entered.
What Is Break-Even ROAS?
Break-even ROAS is the ROAS at which the revenue generated by your ads exactly covers the ad spend and the variable costs associated with those sales. At this point, you make no contribution profit after advertising.
In simpler terms, it is the minimum ROAS your ads need to achieve to avoid losing money on the advertised sales.
How to Calculate Break-Even ROAS
Your break-even ROAS depends on your contribution margin ratio. This is the percentage of each sale left after non-ad variable costs.
Break-Even ROAS Formula
Contribution margin ratio = (Selling price − Non-ad variable costs) ÷ Selling price
Break-even ROAS = 1 ÷ Contribution margin ratio
Use the contribution margin ratio as a decimal. For example, 40% is 0.40. Divide 1 by 0.40 to get a break-even ROAS of 2.5x.
If your non-ad variable costs equal or exceed the selling price, there is no margin left for advertising and no usable break-even ROAS.
Costs to Include
Include every non-ad cost that changes with each sale:
- Product cost or cost of goods sold (COGS)
- Shipping and fulfillment costs paid by your business
- Packaging costs
- Payment processing and per-order platform fees
- Expected losses from refunds, returns, or chargebacks
- Taxes or duties absorbed by your business
- Any other variable cost per order
Break-Even ROAS Example
A product sells for $100. Product, shipping, and payment costs total $60. That leaves $40 from each sale, which is a 40% contribution margin ratio. Divide 1 by 0.40 to get a break-even ROAS of 2.5x.
Frequently Asked Questions
What is break-even ROAS?
Break-even ROAS is the minimum ROAS needed to avoid losing money on an advertised sale. At this point, the revenue left after non-ad variable costs is just enough to cover the advertising.
How do I calculate break-even ROAS?
Divide 1 by your contribution margin ratio. For example, if the ratio is 40%, use 0.40 in the formula. Your break-even ROAS is 2.5x.
What costs should I include in break-even ROAS?
Include non-ad costs that change with each sale, such as product cost, shipping, fulfillment, packaging, payment fees, expected losses from refunds or returns, and taxes or duties your business absorbs. Keep fixed costs separate unless you allocate them to each sale.
Is a 1x ROAS always break-even?
No. A 1x ROAS only means attributed revenue equals ad spend. It leaves nothing to cover product cost or other variable costs. If you have a positive contribution margin, your break-even ROAS will be higher than 1x.
What is a good break-even ROAS?
There is no single good break-even ROAS for every business. Break-even ROAS is the minimum threshold your campaigns need to exceed, and there is no universal industry benchmark. The result is only useful if you include all relevant variable costs.