Break-Even ROAS Calculator (Free)

What is break-even ROAS?

Break-even ROAS is the return on ad spend at which your ads pay for themselves and nothing more. Below it, every sale from ads loses money once you count product cost, shipping and payment fees. Above it, ads make a profit. It depends entirely on your margin, which is why two stores can need very different ROAS.

How do you calculate break-even ROAS?

Divide your average order value by the profit you make on an order before ad costs. If an $80 order leaves $40 after product, shipping and fees, your break-even ROAS is 80 ÷ 40 = 2. Put another way, it is 1 divided by your margin, so a 50% margin always means a break-even ROAS of 2.

Start with your average order value, before sales tax.
Subtract the cost of the products in an average order.
Subtract shipping, packing and fulfillment.
Subtract payment fees. Stripe's standard US rate is 2.9% + 30¢ per card payment.
Subtract any other per-order costs, such as apps or an allowance for returns.
Divide the order value by what is left. That is your break-even ROAS.

Worked example

Take an online store with an $80 average order, $28 of product cost, $8 of shipping and Stripe's 2.9% + 30¢ fee ($2.62). Profit before ads is $41.38, a 51.7% margin, so the break-even ROAS is 80 ÷ 41.38 = 1.93. The store can pay up to $41.38 in ads for each sale and still break even.

To keep 10% of revenue as profit after ads, the store needs $8 of each order left over, so ads can cost at most $33.38 per sale. That means a target ROAS of 80 ÷ 33.38 = 2.40, or 240% in Google Ads. These are the calculator's starting numbers; change them to your own.

How do you use break-even ROAS in Google Ads and Meta?

Use it as the floor for any ROAS target and as the line for pausing ads. Google Ads takes target ROAS as a percentage, defined as the conversion value you want for each dollar of ad spend, so a ROAS of 2.4 is entered as 240%. In Meta Ads Manager, compare each campaign's purchase ROAS with your break-even number every week.

Campaigns above your target ROAS: candidates for more budget.
Between break-even and target: profitable but thin. Test new creative or offers.
Below break-even for two or more weeks with enough sales to judge: pause or rebuild.

Why your real ROAS can differ from the ad platform's

Ad platforms count sales they can link to an ad within their own attribution window, so their ROAS can be higher or lower than what your store actually took in. Before you act on a number, compare the platform's reported sales with your store or CRM for the same period, and make sure purchase tracking is set up and tested.

Common mistakes

Using revenue minus product cost only, and forgetting shipping, fees and returns.
Comparing ROAS across stores or products with different margins.
Counting repeat purchases you have not measured yet to justify a low first-order ROAS.
Judging a campaign on a few days of data.

Frequently asked questions

What is a good ROAS?

A good ROAS is any ROAS above your break-even ROAS, plus the profit you want to keep. There is no single good number: a store with a 70% margin can profit at 1.6, while a store with a 25% margin needs at least 4. Work out your own break-even first.

What is the formula for break-even ROAS?

Break-even ROAS = average order value ÷ profit per order before ad costs. It is the same as 1 ÷ your margin after product, shipping, payment and other per-order costs. A 50% margin gives a break-even ROAS of 2.

Is ROAS the same as ROI?

No. ROAS only compares ad revenue with ad spend. ROI compares profit with everything you spent, so it accounts for product costs, fees and overheads. A campaign can show a high ROAS and still lose money if margins are thin.

How do I enter my target ROAS in Google Ads?

Google Ads takes target ROAS as a percentage: a ROAS of 2.5 is entered as 250%. Google defines it as the average conversion value you want for each dollar spent on ads.

Does break-even ROAS include repeat purchases?

Not in this calculator. It uses the first order only, which is the safe way to judge an ad. If many customers come back, you can accept a lower first-order ROAS, but only once you know your real repeat rate from your store data.

Sources

Want help bringing your ROAS above break-even? See Meta and Google Ads management, read how to test Meta ads properly, or browse more free marketing tools.

Break-even ROAS calculator

Your numbers, per order