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Break-Even ROAS Calculator

Stop guessing. Know exactly what ROAS you need to be profitable before you spend a single dollar on ads.

SELLING PRICE

COST OF GOODS SOLD (COGS)

Include product cost, shipping, and transaction fees.

Break-Even ROAS

0.00

Profit Margin

0%

Profit Per Sale

$0.00

What is Break-Even ROAS?

Break-Even Return On Ad Spend (ROAS) is your financial "zero point." It's the exact ROAS you need to cover your product costs and ad spend.

Any ROAS above this number means you're profitable. Any ROAS below means you're losing money.

Understanding Your Inputs

1. Product Selling Price

The final price your customer pays (before shipping, unless you offer free shipping).

2. Cost of Goods Sold (COGS)

To be accurate, you must include ALL variable costs:

  • Product Cost (Supplier price)
  • Shipping Cost (To customer)
  • Transaction Fees (~2.9% + 30¢)
  • Packaging (Boxes, inserts, etc.)

The Formula Explained

Profit Margin = (Price - COGS) / Price

Break-Even ROAS = 1 / Profit Margin

Real World Example: The Water Bottle

Selling Price:

$40.00

Total COGS (Product + Ship + Fees):

-$18.20

Profit Per Sale:

$21.80

Calculation:

Margin = $21.80 / $40.00 = 54.5%

Break-Even ROAS = 1 / 0.545 = 1.83

You need $1.83 in revenue for every $1 spent on ads to break even.

What to do with your number?

Below Break-Even?

  • Stop scaling immediately.

  • Improve your creative (CTR).

  • Raise your price or lower COGS.

Above Break-Even?

  • Scale your budget confidently.

  • Launch new lookalike audiences.

  • Test new creative angles.

Common Questions

What is a "good" ROAS?

It depends entirely on your profit margin. A business with 70% margins is profitable at 1.5 ROAS, while a business with 20% margins loses money at 4.0 ROAS. The only "good" ROAS is one comfortably above your break-even point.

ROAS vs. ROI?

ROAS measures revenue from ad spend (Tactical). ROI measures total profit from the entire investment (Strategic). Use ROAS to optimize ads day-to-day, use ROI to measure overall business health.

Fixed Costs?

Do not include fixed costs (rent, software, salaries) in this calculation. This tool finds your per-sale break-even. Your fixed costs should be covered by the total profit volume, not the unit economics.

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