Break-even ROAS calculator
Before you judge any campaign, you need to know the line between profit and loss. Enter your price and unit costs to get your break-even ROAS and the most you can pay for a sale.
How to use this tool
- 1Enter your product selling price.
- 2Add the product cost and shipping cost per order.
- 3Add payment and platform fees as a percentage.
- 4Read your break-even ROAS and maximum cost per purchase.
- 5Set campaign targets above the break-even line, for example the 20% net margin target shown.
How break-even ROAS works
Break-even ROAS equals selling price divided by the profit you make on an order before advertising. If you sell a product for 49 dollars and keep 24 dollars after product cost, shipping and fees, your break-even ROAS is 49 divided by 24, which is about 2.04x.
The same profit figure is also your maximum cost per purchase. Spend more than that to acquire an order and you lose money on the first sale.
Worked example
Price 49 dollars, product cost 14 dollars, shipping 6 dollars and 3.5% fees of about 1.72 dollars leave a profit of about 27.28 dollars before ads. The break-even ROAS is about 1.80x and you can pay up to 27.28 dollars per purchase.
Ways to lower your break-even ROAS
- Raise prices or create bundles to increase average order value
- Negotiate product and shipping costs as volume grows
- Add an upsell or post-purchase offer
- Focus on repeat purchases so lifetime value carries acquisition costs
Frequently asked questions
What is a break-even ROAS?
It is the return on ad spend at which ad revenue exactly covers your product costs and ad spend, leaving zero profit.
Is a 2x ROAS profitable?
Only if your margin before ads is above 50%. Use the calculator with your real costs to know for sure.
Should I include returns?
Yes, if returns are meaningful. Add the average cost of returns per order to your product or shipping cost.
Can I run ads below break-even?
Some brands accept a first-order loss when customers buy again. Only do this if you know your repeat rate and lifetime value.
How is this different from target ROAS?
Break-even ROAS is the floor. Your target ROAS should sit above it to leave room for overheads and profit.
See which Facebook and Instagram ads your competitors keep running, the clearest signal of what is profitable in your niche.