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Break-even ROAS calculator

Find the lowest ROAS at which your ads stop losing money on each order.

Inputs

Order
Costs per order
Payment fees

Break-even ROAS

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Contribution per order
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Contribution margin
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Break-even cost per order
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The most you can spend on ads to win one order.

How it's calculated

Contribution = order value − product − shipping − fees − other

Break-even ROAS = order value ÷ contribution

Example

  • A $60 order costs $18 + $6 + $2.04 in fees + $2 other.
  • That leaves $31.96, a 53.3% contribution margin.
  • Break-even ROAS is 60 ÷ 31.96 = 1.88. Below 1.88x, each ad-driven order loses money.

More on this: What is a good ROAS?, Contribution margin

Questions

  • Why not use gross margin?

    Gross margin only takes off the product cost. Shipping and payment fees come out of every order too, so leaving them out makes break-even look lower than it is.

  • Should my ROAS target be break-even?

    No. At break-even the ads pay for themselves and nothing else. Set your target high enough to also cover fixed costs like staff, rent and software.

Other calculators: ROAS calculator, MER calculator, Shopify profit calculator

Made by Soran, attribution for online stores.