Break-Even ROAS Calculator
Find the minimum ROAS your store needs to break even given your product cost, fees and shipping. Anything above this number is profit on the contribution margin.
Per-order economics
Enter the unit economics of one sale.
Per-order. Use 0 if customer pays shipping.
Stripe / PayPal / Shopify Payments are usually 2.9–3.5%.
Per-order packaging, returns reserve, etc.
Break-even ROAS
Strong margin. You only need a 2x or lower ROAS to break even — most healthy campaigns will be profitable.
- Contribution margin per order
- $36.20
- Margin %
- 60.3%
- Total variable cost / order
- $23.80
How it's calculated
The break-even ROAS formula is:
Break-even ROAS = Selling price ÷ Contribution margin Contribution margin = Price − COGS − Shipping − Fees − Other
Worked example. A $60 product with $18 COGS, $4 shipping, 3% payment fees ($1.80) and no other costs has a contribution margin of $36.20. Break-even ROAS is 60 ÷ 36.20 = 1.66x. That means every $1 in ads must produce at least $1.66 in revenue to keep the campaign in the black on variable cost.
To also cover fixed costs and earn real profit, target 1.5–2x your break-even ROAS. In the example above, that's a 2.5–3.3x target.
Definitions
Frequently asked questions
What is break-even ROAS?+
Break-even ROAS is the minimum return on ad spend you need to cover product cost, shipping and fees on the orders that ad spend generates. Above this number you're profitable on a contribution-margin basis; below it, every additional sale loses money.
How is break-even ROAS calculated?+
Break-even ROAS = Selling price ÷ Contribution margin per order. Contribution margin = Selling price − Product cost − Shipping − Payment fees − Other variable costs. The lower your margin, the higher the ROAS you need to break even.
Should I aim for break-even ROAS or higher?+
Break-even ROAS only covers variable costs. To cover fixed costs (rent, salaries, software) and earn profit, you usually want to run 1.5–2x your break-even ROAS as your real target. Use this tool to find your floor — then pick a target above it.
Do I include shipping if the customer pays it?+
If shipping is fully passed through to the customer at cost, set the field to 0. If your shipping price doesn't fully cover real cost, set it to your actual cost minus what the customer pays.
How do I lower my break-even ROAS?+
Three reliable levers: (1) raise price (even small increases dramatically reduce break-even ROAS); (2) lower COGS by negotiating with your supplier or moving production; (3) increase AOV through bundles, upsells and free-shipping thresholds — a higher AOV with the same margin % cuts the ROAS you need.
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