Break Even ROAS Calculator
Home / Free Tools / Free Ecommerce Tool
This break even ROAS calculator tells you the lowest return on ad spend your store can accept before every order starts losing money. Enter four numbers from your Shopify admin and supplier invoices, and it returns your contribution margin per order, your margin as a percentage, the break-even ROAS and the break-even CPA.
Most founders judge Meta or TikTok results against a ROAS number someone else told them was good. That number means nothing until you know your own floor. A brand with cheap COGS can be profitable at 1.6x, while a brand with heavy shipping costs can lose money at 2.5x. Work out the floor first, then set targets above it.
What is break-even ROAS?
Break-even ROAS is the return on ad spend at which an order covers its product cost, shipping, payment fees and the ad spend that produced it, leaving zero profit. Divide selling price by contribution margin per order before ads. A $60 order with $32.20 of margin breaks even at 1.86x ROAS.
Break-even ROAS calculator
Inputs: Selling price per order ($), Product cost (COGS) per order ($), Shipping and fulfilment per order ($), Payment processing fee (%). The calculator runs in your browser; nothing is stored.
How to use the break-even ROAS calculator
Use per-order figures, not monthly totals. If your average order contains more than one unit, use the average order value and the average landed cost of a typical basket.
- Selling price per order: what the customer pays for the products, after discounts. Use your average order value net of discount codes if most orders use one.
- Product cost (COGS) per order: the landed cost of the goods, including the supplier price, inbound freight and duties.
- Shipping and fulfilment per order: outbound postage, pick and pack fees, packaging and any 3PL charges you pay on each order.
- Payment processing fee %: the percentage your payment provider takes from each order. Enter the percentage only; small fixed per-transaction fees can be added to the shipping line.
The break-even ROAS formula with a worked example
The calculator first finds how much each order contributes before any ad spend, then works out how much revenue each ad dollar has to bring back to cover that margin exactly.
Contribution margin per order = price - COGS - shipping - (price x fee %)
Contribution margin % = contribution margin per order / price
Break-even ROAS = price / contribution margin per order, which is the same as 1 / contribution margin %
Break-even CPA = contribution margin per order
Example: a skincare brand sells a $60 order. COGS is $18, shipping and fulfilment is $8 and the payment fee is 3%, which is $1.80 on a $60 order. Contribution margin per order is $60 - $18 - $8 - $1.80 = $32.20. That is a 53.7% contribution margin. Break-even ROAS is $60 / $32.20 = 1.86x, and the break-even CPA is $32.20. If Meta delivers a purchase for less than $32.20, that order made money.
| Line | Example value |
|---|---|
| Selling price per order | $60.00 |
| COGS per order | $18.00 |
| Shipping and fulfilment | $8.00 |
| Payment fee (3%) | $1.80 |
| Contribution margin per order | $32.20 (53.7%) |
| Break-even ROAS | 1.86x |
| Break-even CPA | $32.20 |
How to read the result
Your break-even ROAS is a floor, not a goal. Running exactly at that number means ads are paying for themselves but nothing is left for salaries, software, returns or profit. Most brands set a target ROAS comfortably above break-even for prospecting and accept something closer to break-even on campaigns that bring in new customers who are likely to reorder.
The break-even CPA is often more useful day to day than the ROAS figure, because it maps directly to the cost per purchase column in Ads Manager. When a campaign's CPA sits under your break-even CPA, it is contributing profit on the first order. To understand where the margin itself comes from, read our guide to contribution margin at /glossary/contribution-margin.
What to do next
If your break-even ROAS is above roughly 2.5x, the problem is usually the offer and unit economics rather than the ads. A higher price, a bundle that lifts order value, or cheaper fulfilment lowers the floor for every campaign you run.
- Compare your actual Meta ROAS with the floor, using the standard ROAS calculator at /roas-calculator.
- Raise order value with bundles and test the effect in the AOV calculator at /tools/aov-calculator.
- Book a Meta ads audit at /meta-ads-audit if campaigns sit below break-even and you cannot see why.
Common mistakes
Break-even ROAS is only as accurate as the costs you feed it. The errors below all push the number in the same direction, making the floor look lower and campaigns look safer than they are.
- Using the product price instead of the net order value after discount codes, which makes the floor look lower than it is.
- Leaving out shipping you subsidise with free delivery. If you pay it, it belongs in the calculation.
- Ignoring returns and refunds. If a meaningful share of orders come back, reduce the selling price input to reflect net revenue kept.
- Judging break-even against platform-reported ROAS only, which can over-count conversions. Check blended numbers too.
Proof from real accounts
- $50M+ Meta ad spend managed: Across our client accounts over 12+ years in ecommerce
- 56% Profit margin: $185,936 in 21 days for a dropshipping store (see the proof)
- 4.39x ROAS: $115,416 on $26,271 spend for a skincare brand (see the proof)
Frequently asked questions
How do I calculate break-even ROAS?
Subtract product cost, shipping and payment fees from the selling price to get contribution margin per order. Then divide the selling price by that margin. A $60 order with $32.20 of margin has a break-even ROAS of 1.86x. Below that number, each ad-driven order loses money; above it, the order contributes profit.
Is break-even ROAS the same as target ROAS?
No. Break-even ROAS is the point where an order makes zero profit after ad spend. Target ROAS is the number you aim for, set above break-even so there is room for overheads, returns and profit. Many brands accept a lower target on new-customer campaigns if repeat purchases are strong.
Should I include fixed costs like salaries in break-even ROAS?
Not in this calculation. Break-even ROAS uses variable costs that scale with each order: COGS, shipping and payment fees. Fixed costs such as salaries, software and rent are covered by the profit you earn above break-even. Mixing them in makes the number move every time volume changes.
What is break-even CPA?
Break-even CPA is the most you can pay in ad spend to acquire one order without losing money on it. It equals your contribution margin per order before ads. If your margin is $32.20, any purchase that costs less than $32.20 in ad spend is profitable on the first order.
How do I lower my break-even ROAS?
Improve contribution margin. You can raise prices, increase order value with bundles or upsells, negotiate lower product costs, reduce fulfilment fees or cut free shipping thresholds that erode margin. Each change lowers the ROAS your ads need to reach, which gives campaigns more room to scale before they hit the floor.
Related
- Free Ecommerce Calculators for DTC Brands
- Contribution margin: CM
- Free ROAS calculator
- Meta Ads Audit for Ecommerce Brands
- What Is a Good ROAS for Ecommerce? Break-Even by Margin
Not sure your ROAS is profitable?
Book a Brand Growth Audit. Gaurav reviews your ad account, creative, store and unit economics with you and shows where margin is leaking. Book a Brand Growth Audit.