Break-even ROAS calculator
Return on ad spend only means something next to the margin underneath it. Enter what you keep on a sale and this tells you the ROAS a campaign has to beat before it is contributing rather than just turning over money.
INPUTS
Four
RUNS IN
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FORMULA
Printed below
Most accounts optimise toward a target set before anyone checked where break-even actually was.
- The calculator
What ROAS do you actually need?
Four inputs. Change any of them and every figure updates as you type.
Formula: contribution = (order value × gross margin − delivery cost) × (1 − return rate). Break-even ROAS = order value ÷ contribution. Nothing is sent anywhere; this runs entirely in your browser.
- Reading it
What the number actually tells you
Break-even is a floor, not a target. Confusing the two is how accounts end up scaling losses efficiently.
Break-even ROAS is the point where the sale stops costing you money. It is not a goal — a campaign sitting exactly on it generates revenue and zero contribution, which pays for neither your overheads nor your time. The fourth output shows what you would need to leave thirty per cent of contribution as actual profit.
The more useful discovery is usually the gap between this figure and the target your account is currently optimising toward. Most targets were set years ago from a blended number, and margins have moved since. If your platform target is below the break-even this calculator returns, the account is buying revenue at a loss and reporting it as success.
- A single catalogue-wide target hides both ends of the range
- Platform ROAS counts gross revenue, including what comes back
- Run this per margin tier, not once for everything you sell
- Getting it wrong
Four ways this number gets miscalculated
Each of these makes break-even look lower than it is, which is the direction that costs money.
Leaving delivery out
Carriage and packaging come out of contribution before advertising does. On a heavy or low-value catalogue this single omission can move break-even by a third.
Ignoring returns
A returned order still counted as revenue on the way out. On apparel, a gross ROAS figure flatters every campaign that sells the wrong size.
Using invoice cost as landed cost
Duty, inbound freight and payment processing all sit between the invoice and the real margin. Most stores overstate gross margin by several points here.
Blending a wide catalogue
One target across a $40 accessory and a $900 item guarantees overpaying for one and underspending on the other. Segment by margin tier and run this for each.
If you are not sure which of these applies to you, the growth assessment checks the margin model as its second point.
- Questions
Break-even ROAS FAQs
The questions this calculator usually raises.
What is a good ROAS?
There is no universal answer, which is the point of this tool. A 3x ROAS is excellent on a 70% margin catalogue and loss-making on a 25% one. The only meaningful benchmark is your own break-even, and the only useful target is comfortably above it.
Should I use gross or net revenue in my ROAS?
Net, wherever you can. Ad platforms report gross, which counts returned orders as wins. On categories with meaningful return rates that difference reorders which campaigns look best — see our ROAS definition.
Does this account for repeat purchases?
No. This is a first-order calculation on a single sale. If your second-purchase rate is reliable you can justify running below first-order break-even, but that decision needs cohort data rather than a calculator.
Why is my platform ROAS higher than my real one?
Usually three reasons compounding: modelled conversions, view-through attribution, and gross rather than net revenue. None of them are dishonest on the platform’s part; all of them make the number larger than what reached your bank account.
What if my margin varies a lot by product?
Run the calculator once for each margin tier and set separate targets. A blended input produces a blended answer that is wrong at both ends of the catalogue, which is the most common structural problem we find in paid accounts.
Is break-even ROAS the same as break-even ACoS?
They are the same idea inverted. ACoS is cost as a percentage of sales, ROAS is sales divided by cost. On Amazon the fee structure differs, so use the break-even ACoS calculator instead.
- Next
Related tools and reading
CALCULATOR
The Amazon equivalent, after referral fees and FBA, plus what it implies for TACoS.
DEFINITION
The formula, break-even from margin, and why platform figures double-count.
FREE AUDIT
Five working days across six disciplines, including whether your targets sit above break-even.
Target below break-even?
It is more common than you would think, and it is usually invisible in platform reporting. The free audit checks margin-priced bidding as one of its twelve points.