Break-even ROAS Calculator

Why break-even ROAS is different from ROAS

A normal ROAS calculator tells you what happened after spend and revenue are known. Break-even ROAS tells you the minimum return you need before launching or scaling.

Costs to include

Include product cost, fulfillment, platform fees, payment processing, refund reserve, per-order handling, and the share of monthly fixed costs assigned to this offer. Leaving costs out makes the ROAS target look safer than it is.

• Use per-order costs for shipping and handling.
• Use percent costs for platform, payment, and refund assumptions.
• Enter planned monthly orders so fixed overhead can be allocated without hiding it in another field.

From unit economics to a monthly ad budget

The margin waterfall shows what remains from each order after refunds, fees, product costs, fulfillment, variable costs, and allocated overhead. The remaining amount is the maximum ad spend per order; multiplying it by planned orders gives the break-even monthly budget.

• The target budget reserves your selected profit margin before ads.
• Use paid orders from the same planning month as the fixed costs.
• A budget ceiling is a unit-economics limit, not a promise that the channel can spend it efficiently.

Why the line-item cost breakdown matters

A line-item model keeps platform fees, refunds, shipping, and fixed-cost allocation visible. That makes the margin waterfall safer for scale decisions than hiding every cost inside one gross-margin assumption.

How to include fees and refunds

Treat fees and refund reserves as part of contribution cost. Taxes and VAT depend on how your business reports revenue and cost, so keep the model consistent with your accounting view.

When to scale, pause, or retest

Use break-even ROAS as a threshold, not a guarantee. If observed ROAS is below break-even, the product needs better margin, creative, conversion rate, or average order value before scale.

Formula quick reference

• Fixed cost per order = monthly fixed costs / planned monthly orders
• Max ad spend per order = selling price - variable costs - fixed cost per order
• Max monthly ad budget = max ad spend per order x planned monthly orders
• Target monthly ad budget = target ad spend per order x planned monthly orders
• Variable contribution profit = selling price - product cost - shipping - fees - refund reserve - other variable costs
• Contribution profit after fixed allocation = variable contribution profit - fixed cost per order
• Break-even ROAS = selling price / contribution profit after fixed allocation
• Target ROAS = selling price / (contribution profit after fixed allocation - target profit)
• Break-even CPA = contribution profit after fixed allocation
• Target CPA = contribution profit after fixed allocation - target profit
• ACoS equivalent = 1 / ROAS

Worked example

Common mistakes

• Using only product cost and ignoring payment, platform, shipping, refund, or handling costs.
• Using fixed costs and planned orders from different months.
• Comparing blended account ROAS to a single-product break-even threshold.
• Treating break-even ROAS as a profit goal instead of the minimum before profit.
• Treating the maximum monthly budget as a traffic or conversion forecast.

What the result means

• The right break-even ROAS is lower for high-margin products and higher for low-margin products.
• ACoS is the inverse view: a 2.5x ROAS equals 40% ACoS.