Ecommerce Advertising Calculator

Break-Even ROAS Calculator

Find the minimum return on ad spend your campaigns need to avoid losing money. Account for product costs, payment fees, shipping, refunds, and your desired profit margin.

Business Inputs

Enter your average revenue and variable costs per order.

Currency

Average order value Revenue per order

Product cost COGS

Shipping and fulfillment

Payment processing fee

Other variable costs

Refund or return rate

Desired profit margin after ad spend 15%

Your ROAS Threshold

Use these numbers to evaluate campaign performance.

Break-Even ROAS

1.78x

Your campaign must generate at least this much revenue for every currency unit spent on advertising.

Revenue equals total variable costs

Maximum ad spend per order $53.35 At the break-even point

Contribution margin 56.16% Before advertising costs

Target ROAS 2.48x Includes desired profit

Target ad spend per order $38.35 To preserve target profit

Effective revenue $95.00 After expected refunds

Non-ad variable costs $41.65 Costs before advertising

Campaign benchmark: A ROAS below 1.78x is expected to lose money. A ROAS above 2.48x should meet your selected profit target.

What Is Break-Even ROAS?

Break-even ROAS is the minimum return on ad spend required for an advertising campaign to cover its associated costs without making a profit or loss. It connects your marketing performance with your product economics.

A campaign can generate revenue and still lose money when product costs, shipping charges, payment fees, returns, and other variable expenses consume too much of each sale. This is why relying only on revenue-based ROAS can provide an incomplete picture.

The Break-Even ROAS Calculator estimates how much of each order remains available for advertising. It then calculates the revenue multiple your campaign must produce to avoid a negative contribution.

Why your break-even ROAS matters

Knowing your threshold helps you set realistic campaign targets, compare advertising channels, adjust bids, identify unprofitable products, and protect your margins while scaling.

Break-Even ROAS Formula

Break-Even ROAS = Effective Revenue ÷ Maximum Ad Spend

Maximum ad spend is the contribution amount remaining after deducting non-advertising variable costs from effective revenue.

Effective revenue accounts for expected refunds.
Variable costs include COGS, fees, shipping, and fulfillment.
Target ROAS reserves part of the revenue as desired profit.

Simple Process

How the Break-Even ROAS Calculator Works

The calculator converts your order economics into practical advertising benchmarks in four steps.

Enter order revenue

Add your average order value or the typical revenue generated by one converted customer.

Add variable costs

Include product cost, shipping, processing fees, fulfillment, and other expenses linked to each order.

Account for refunds

Enter your expected refund or return rate to estimate the effective revenue retained by the business.

Review your ROAS targets

Compare the break-even threshold with the target ROAS needed to preserve your chosen profit margin.

Smarter Decisions

How to Use Your ROAS Results

Use the calculated thresholds as decision points rather than viewing ROAS as an isolated marketing metric.

Evaluate campaigns

Campaigns below break-even ROAS may require lower acquisition costs, better conversion rates, or higher order values.

Compare products

Products with different margins should not use the same ROAS target. Calculate a separate threshold for each major product group.

Scale responsibly

Increase budgets only when campaign performance remains above the threshold needed to support your business goals.

Improve pricing

Test how pricing changes affect your available ad spend, contribution margin, and required return.

Increase order value

Bundles, upsells, and cross-sells can improve order economics and make advertising more sustainable.

Protect your margin

The target ROAS shows the return needed after reserving your desired profit percentage from each order.

Common Questions

Break-Even ROAS Calculator FAQs

Understand how break-even ROAS relates to profitability, margins, and advertising decisions.

What is a good break-even ROAS?

There is no universal good break-even ROAS. A lower threshold is generally more flexible because it means your business retains a larger contribution margin before advertising. The correct figure depends on your pricing, costs, refund rate, and margins.

What does a 2x ROAS mean?

A 2x ROAS means the campaign generated two currency units in revenue for every one currency unit spent on advertising. It does not automatically mean the campaign was profitable because product and operating costs must also be considered.

Is break-even ROAS the same as profitable ROAS?

No. Break-even ROAS covers the included variable costs but produces no contribution profit after advertising. A profitable or target ROAS must be higher so that part of the order revenue remains as profit.

Should I include shipping in the calculation?

Include shipping and fulfillment costs when your business pays them. When customers pay a separate shipping charge, include that charge in revenue and enter the actual shipping expense as a cost.

How do refunds affect break-even ROAS?

Refunds reduce the effective revenue retained from acquired customers. A higher refund rate usually increases the required break-even ROAS because less revenue remains available to cover product and advertising costs.

Why is my target ROAS higher than my break-even ROAS?

Break-even ROAS uses the full contribution amount for advertising. Target ROAS first reserves your desired profit, leaving a smaller allowable advertising budget. This creates a higher required ROAS.

How often should I recalculate break-even ROAS?

Recalculate whenever your selling price, supplier costs, shipping rates, payment fees, return rate, or average order value changes. Businesses with frequently changing costs may review it monthly.

Important: This calculator provides an estimate based on the values entered. It does not automatically include fixed overhead, salaries, taxes, agency fees, software subscriptions, attribution differences, or customer lifetime value.