Free tools

Break-even ROAS calculator

The return a product needs before ads cover its costs.

COGS for one order

%
+ More costs
%

Reduces revenue kept. Costs stay in full.

Break-even ROAS

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Margin

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Max you can pay per order

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Break-even CPA

Profit per order

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At your ROAS

How it's calculated
  • Payment fee = average order value × fee % + fixed fee
  • Kept revenue = average order value × (1 − refund %)
  • Variable costs = product cost + shipping + payment fee + other variable costs
  • Contribution = kept revenue − variable costs
  • Profit margin = contribution ÷ average order value
  • Break-even ROAS = average order value ÷ contribution
  • Break-even CPA = contribution per order
  • Ad cost per order = average order value ÷ current ROAS
  • Profit per order = contribution − ad cost per order
  • ROAS = revenue ÷ ad spend
  • Profit = (revenue ÷ average order value) × contribution − ad spend

Calculated in your browser. Nothing you type is saved or sent. USD is a label, not a conversion.

Check a campaign

Enter a ROAS multiple, such as 4 for a 4× return, or enter both ad spend and revenue. Plain ROAS is revenue ÷ spend.

Add an actual ROAS, or both ad spend and revenue, to see if this client is profitable.

What break-even ROAS means

ROAS is revenue divided by ad spend. A 4× ROAS means four dollars of tracked revenue for each dollar of spend. Break-even ROAS is the multiple where that revenue only just covers product cost, shipping, payment fees, other variable costs, and the ads themselves. Above it, the client makes a contribution. Below it, the ads lose money even if the platform looks busy.

Ad accounts usually report ROAS on the order value they tracked, before refunds. This calculator uses that same order value on the top of the ratio, and subtracts refunds from the revenue you keep. If your report already shows net revenue, put that net figure in as the average order value and leave refunds at zero.

The formulas

  • Payment fee = average order value × fee % + fixed fee, rounded to the nearest cent.
  • Kept revenue = average order value × (1 − refund %).
  • Variable costs = product cost + shipping + payment fee + other variable costs.
  • Contribution = kept revenue − variable costs.
  • Profit margin = contribution ÷ average order value.
  • Break-even ROAS = average order value ÷ contribution. That is the same as 1 ÷ margin.
  • Break-even CPA = contribution per order.
  • ROAS = revenue ÷ ad spend.
  • Profit = (revenue ÷ average order value) × contribution − ad spend.

Costs stay in full when you enter a refund rate. Shipping and fees are usually spent before a return comes back. If you recover product cost on returns, lower the product cost to the average you actually keep.

If contribution is zero or negative, the page says the order can’t break even. There is no ROAS target that fixes a product which loses money before ads.

How to use the calculator

  1. Choose a currency. USD, AUD, GBP, and EUR change the symbol only.
  2. Enter the average order value, product cost, shipping, and fees. Leave a cost blank to count it as zero.
  3. Add a refund percentage if returns are part of the margin.
  4. Read the margin, break-even ROAS, and break-even CPA.
  5. To judge a live result, enter actual ROAS, or enter both ad spend and revenue. ROAS here is a multiple: type 4, not 400%.

Worked example

An order is $80.00. Product cost is $30.00, shipping is $6.00, and the payment fee is 2.9% plus $0.30, which comes to $2.62. Refunds are zero. Kept revenue is $80.00. Variable costs are $38.62. Contribution is $41.38, so the margin is 51.7%.

Break-even ROAS is 1.93×. Break-even CPA is $41.38. Anything above a 1.93× return, or a cheaper cost per order than $41.38, contributes profit.

The client spends $1,000.00 and tracked revenue is $4,000.00. ROAS is 4.00×. Profit after variable costs and ads is $1,069.00. The same 4× ROAS, entered on its own, is about $1.07 of profit per $1.00 of spend.

CPM calculator

CPM is the cost of 1,000 impressions. The CPM tab solves any one of CPM, cost, and impressions from the other two:

  • CPM = cost ÷ impressions × 1,000
  • Cost = CPM × impressions ÷ 1,000
  • Impressions = cost ÷ CPM × 1,000

A $50.00 spend on 10,000 impressions is a CPM of $5.00. With 200 clicks, CTR is 2% and CPC is $0.25. If impressions are zero, CPM cannot be calculated. If CPM and cost are both zero, impressions are not determined.

The links those impressions click through to can be tagged with the UTM builder. Use it for Meta, Klaviyo, Google, TikTok, or organic social. You only need the channel the client runs.

FAQ

What is break-even ROAS?

Break-even ROAS is the return on ad spend where the contribution from orders equals the ad spend. Below it, the ads lose money after product, shipping, fees, and other variable costs. Above it, they contribute profit.

How is break-even ROAS calculated?

Contribution is the revenue you keep after refunds, minus product cost, shipping, payment fees, and other variable costs. Break-even ROAS is average order value divided by that contribution. That is the same as 1 divided by the profit margin.

What is break-even CPA?

Break-even CPA is the most you can pay to acquire one order and still cover variable costs. It is the contribution on that order. It is not a target for profit. Any higher CPA loses money.

What if the margin is negative?

The order loses money before any ad spend. Ads cannot break even on it. Lower the costs, raise the price, or reduce refunds before judging a ROAS target.

How do refunds change the result?

The refund percentage reduces revenue kept. Costs stay in full, because product, shipping, and fees are usually spent before you know about the return. If you recover product cost on returns, lower the product cost to the average you actually keep.

What is the difference between ROAS and break-even ROAS?

ROAS is revenue divided by ad spend. It describes a result. Break-even ROAS is the ROAS that result needs to reach before ads cover variable costs. A 4× ROAS can still lose money if the margin is thin.

How does the CPM calculator work?

CPM is the cost per 1,000 impressions. Enter any two of CPM, cost, and impressions and the calculator solves the third. Optional clicks or CTR also show CPC.

Are these numbers sent anywhere?

No. The math runs in your browser. Order values, costs, and campaign numbers are not stored or sent.