Break-even ROAS calculator
Revenue is not profit. This calculator turns your price and costs into the one ROAS number you have to beat, then tells you whether a campaign actually made money.
Your product
Your campaign (optional)
Result
Break-even ROAS
2
- Gross margin
- 50%
- Profit per order before ads (break-even CPA)
- $15
- Campaign ROAS
- 2.6
- Profit after ad spend
- $300
This campaign is above break-even: it earns money after paying for its ads.
The fields start with the example below. Replace them with your own numbers.
What break-even ROAS tells you
ROAS (return on ad spend) is revenue from ads divided by ad spend. It is the first number most people read in Meta Ads or Google Ads, and the easiest one to misread, because every sale has to pay for the product, the shipping and the payment fees before a single cent goes to advertising.
What is left after those costs is your gross margin. Divide 1 by that margin and you get break-even ROAS: the point where a campaign pays for itself and nothing more. A campaign above that line earns money on each order. A campaign below it is paying you to sell, no matter how good its ROAS looks next to other campaigns.
The formulas
Gross margin = (price − product cost − shipping and fees) ÷ price
Break-even ROAS = 1 ÷ gross margin
Profit after ads = ad revenue × gross margin − ad spend
Profit per order before ads is also the most you can pay to win one order (your break-even CPA).
A worked example
Take a small candle shop that sells one candle for $30. The candle costs $9 to make and shipping plus payment fees come to $6 per order. Gross margin is (30 − 9 − 6) ÷ 30 = 0.5, so break-even ROAS is 1 ÷ 0.5 = 2.0. The shop and its numbers are made up for this example; they are the starting values in the calculator above.
Last month the shop spent $1,000 on ads and the platform reported $2,600 in revenue, a ROAS of 2.6. Half of that revenue is gross profit: $1,300. Take away the $1,000 ad spend and the campaign earned $300. Had the same spend brought in $1,800 (ROAS 1.8), the gross profit would have been $900 and the campaign would have lost $100, even though a ROAS of 1.8 sounds healthy.
Three mistakes to watch for
Comparing ROAS across products with different margins. A ROAS of 3 on a product with a 30% margin can lose money, while a ROAS of 2 on a product with a 60% margin makes money. Compare each campaign with its own break-even line, not with the others.
Leaving costs out of the margin. Shipping, payment fees, marketplace commission, packaging and the cost of returns all come out of each sale. If you skip them, break-even ROAS looks lower than it is and losing campaigns look fine.
Trusting the platform's revenue figure on its own. Meta and Google each count conversions with their own attribution windows, and the same order can be claimed by both. Check the revenue in your shop or bank account for the same period before you decide a campaign is profitable.
Break-even ACoS on Amazon
Amazon shows the same idea upside down as ACoS: ad spend divided by ad revenue. ACoS is 1 ÷ ROAS, and break-even ACoS is simply your gross margin. With the candle shop's margin of 0.5, any ACoS under 50% is profitable before other costs.