Break-Even ROAS Calculator
(Minimum Return on Ad Spend)
Find the lowest ROAS at which your ads stop losing money. Enter your selling price and what each unit costs you, and add a profit goal to get a target ROAS.
Step 1 — Revenue
The price your customer pays — this is the Revenue value used in the formula
Step 2 — Cost of Goods (COGS)
Enter your unit costs — product cost is primary, others are optional
Manufacturing / purchase cost
Break-Even ROAS Result
Profitability Metrics (Calculated)
(0 − 0.00) ÷ 0 × 100 = 0.00%
💡 Formula Guide
This break-even ROAS calculator finds the minimum return on ad spend a product needs before its advertising stops losing money. Enter the selling price and what one unit costs you to supply, and it gives your gross margin and break-even ROAS. Add the profit you want to keep and it also gives a target ROAS to aim for in Google Ads or Meta Ads.
The Break-Even ROAS Formula
Gross margin is the share of the selling price left after the costs of supplying one unit. Take a product that sells for $50 and costs $30 in product, packaging and shipping:
- Gross profit is $50 − $30 = $20.
- Gross margin is $20 ÷ $50 = 40%.
- Break-even ROAS is 1 ÷ 0.40 = 2.5x.
At 2.5x, $20 of ad spend brings in one $50 order, and that $20 is the whole gross profit. Spend any more per order and the sale loses money.
Break-Even ROAS by Margin
| Gross margin | Break-even ROAS | As a percentage |
|---|---|---|
| 10% | 10.00x | 1,000% |
| 20% | 5.00x | 500% |
| 25% | 4.00x | 400% |
| 30% | 3.33x | 333% |
| 40% | 2.50x | 250% |
| 50% | 2.00x | 200% |
| 60% | 1.67x | 167% |
| 70% | 1.43x | 143% |
| 80% | 1.25x | 125% |
The relationship is not a straight line. Going from a 20% margin to 25% takes a full point off the hurdle, from 5x to 4x, while going from 60% to 70% takes off less than a quarter of a point. For a low-margin product, a small cost saving does more for ad profitability than a better campaign.
From Break-Even to a Target ROAS
Breaking even is not the aim. To leave a profit, take the share of revenue you want to keep off the margin before dividing.
With the 40% margin above and a goal of keeping 15% of revenue, target ROAS is 1 ÷ (0.40 − 0.15) = 4x. That is the figure to use when a platform asks for a ROAS goal. Google Ads takes it as a percentage, so 4x is entered as 400%. To check what a campaign is returning now, use the ROAS Calculator.
What Break-Even ROAS Leaves Out
The figure treats every order as a one-off first sale at full price. Returns and refunds lower the real margin, so a store with a high return rate should use the margin after returns. Repeat customers work the other way: if buyers come back without being advertised to again, a first order below break-even can still pay off, though only with real repeat-purchase data to back it. Fixed costs such as salaries and rent are not in the formula at all, so a campaign running exactly at break-even is not covering them. The same limit expressed per order is the break-even CPA in the CPA Calculator, and the margin itself can be checked with the Gross Profit Margin Calculator.
How to Use the Break-Even ROAS Calculator
- Enter the selling price: Use the price the customer pays for one unit, or your average order value if orders usually contain more than one item.
- Enter your costs per unit: Add the product cost, then packaging, shipping and any other per-order costs such as payment fees.
- Read the break-even ROAS: The result is the ROAS at which ad spend uses up all of the gross profit. Below it, each order loses money.
- Set a profit goal: Optional. Enter the share of revenue you want to keep as profit and the calculator gives the target ROAS that leaves it.
Frequently Asked Questions
What is break-even ROAS?
It is the return on ad spend at which advertising costs exactly the profit a sale makes before ads, so the order neither earns nor loses money. It is also written BEROAS. Above it a campaign is profitable, below it every order sold through ads makes a loss.
How do you calculate break-even ROAS?
Divide 1 by your gross margin written as a decimal. If a product sells for $50 and costs $30 to supply, the margin is $20 ÷ $50 = 40%, and break-even ROAS is 1 ÷ 0.40 = 2.5x. You get the same answer by dividing the price by the gross profit: $50 ÷ $20 = 2.5.
What is a good break-even ROAS?
A low one. Break-even ROAS is a hurdle, so the lower it is, the easier advertising becomes. A product with a 70% margin breaks even at 1.43x, which most campaigns can beat. A product with a 20% margin needs 5x, which many campaigns never reach.
What costs should I include?
Every cost that occurs each time you sell one more unit: the product, packaging, shipping you pay for, payment processing and marketplace fees. Leave out rent, salaries and software, which do not change with one more order. Leaving out shipping or fees makes break-even ROAS look lower than it really is.
How does break-even ROAS work for dropshipping?
The same way, but the margin is usually thin, so the hurdle is high. A product sold for $30 that costs $18 from the supplier, shipping included, plus about $1.20 in payment fees, leaves $10.80, a 36% margin, and a break-even ROAS of about 2.78x.
Does break-even ROAS change over time?
Yes, whenever price or costs change. A supplier price rise, a discount code, free shipping or higher return rates all reduce the margin and raise the break-even point. Recalculate it when any of them changes, and before a sale.
All figures on this page are worked from the formulas shown, not from industry data.