Free Break-Even ROAS Calculator
Find break-even return on ad spend, maximum acquisition cost and ROAS for a target profit margin. Calculate locally, copy results or download a report. No signup required.
Loading tool…
How to use the break-even roas calculator
Find break-even return on ad spend, maximum acquisition cost and ROAS for a target profit margin. No signup required.
- Open the Break-Even ROAS Calculator and select the currency used for all your inputs. Currency changes only the display; it does not convert amounts.
- Enter your real selling costs and any percentage rates. Load illustrative example only to learn the controls; its rates are not provider pricing.
- Adjust your prices, costs and profit targets to compare the live estimate. Review the formula and any undefined or unattainable results.
- Select Copy results or Download report to keep the inputs and calculation. Your entries are not saved when you leave the page.
When break-even ROAS matters
Return on ad spend tells you how much revenue each dollar of advertising brings back. On its own it says nothing about profit. A campaign with a ROAS of 2 can make money for one store and lose money for another, depending on product costs and fees.
Online store owners use this calculator before launching a campaign to set a minimum ROAS for their ad platform. Media buyers use it to explain to clients why a campaign that looks busy is not profitable. Agencies use it to agree on a target cost per acquisition that still leaves room for the margin the business wants.
The inputs are revenue per order, other variable costs per order, a fee percentage, a target margin percentage, and your actual cost per acquisition. The results show contribution per order, break-even ROAS, target CPA, target ROAS, and profit per order at your actual CPA.
A worked example with the defaults
Start with revenue of 100 per order, other variable costs of 55, a fee of 0 percent, a target margin of 10 percent, and an actual CPA of 20. Contribution is 100 x (1 - 0) - 55 = 45. That is what each order leaves before advertising.
Break-even ROAS is 100 / 45 = 2.22. Below that, ads cost more than the order contributes. Target CPA is 45 - 100 x 0.10 = 35, the most you can pay per order and still keep a 10 percent margin. Target ROAS is 100 / 35 = 2.86. With an actual CPA of 20, profit per order is 45 - 20 = 25.
How the formulas fit together
Contribution equals revenue times one minus the fee rate, minus other variable costs. Fees here mean costs that scale with the sale price, such as payment processing or marketplace commission. Other variable costs cover product cost, packaging, and shipping for one order.
Break-even ROAS is revenue divided by contribution. Target CPA is contribution minus the margin you want to keep, which is revenue times the target margin. Target ROAS is revenue divided by target CPA. Profit per order is simply contribution minus what you actually paid to acquire the order.
If the target margin is larger than the contribution allows, target CPA drops to zero or below. No ad spend can reach that margin, which is why the tool can mark a target ROAS as not attainable.
Common mistakes to avoid
Leaving out shipping, returns, or payment fees makes contribution look bigger than it is, and the break-even ROAS comes out too low. Include every cost that rises with each order.
Ad platforms often report revenue with tax or attribution windows that differ from your books. Compare platform ROAS with your own order data before acting on it. Also keep in mind that fixed costs such as rent or salaries are not part of this calculation, so a positive profit per order is not the same as a profitable business. For larger budget decisions, review the numbers with your accountant or a financial professional.
Useful tips and limitations
- Use consistent per-unit and per-order amounts. Avoid counting a cost twice.
- Review the assumptions before making a pricing decision; actual charges can differ from your inputs.
- Use your average order value rather than a single product price if customers usually buy more than one item.
- Recheck the inputs whenever supplier costs or shipping rates change, since contribution shifts every result.
Common questions
What does a break-even ROAS of 2.5 mean?
It means 2.50 in revenue is required for every 1 spent on advertising to cover the variable costs entered. It does not include unallocated business overhead, tax liabilities or future customer value.
Why is my target ROAS shown as not attainable?
If the contribution left after costs cannot cover the target profit, no positive advertising budget remains. Reduce costs, increase order revenue or lower the target margin.
What is the difference between break-even ROAS and target ROAS?
Break-even ROAS is where ad spend uses up all contribution, while target ROAS also leaves the profit margin you entered.
Should the fee percentage include sales tax?
Usually not. Enter fees that come out of your revenue, such as payment processing or marketplace commission, and keep tax out of revenue as well.
Why is profit per order negative?
Your actual CPA is higher than the contribution per order, so each sale costs more to acquire than it leaves after variable costs.
Your input is processed in your browser without a ToolWorld Online account. Copy or download anything you want to keep before leaving the page.