Break-even ROAS calculator
Your break-even ROAS is the return on ad spend at which a sale from an ad makes exactly zero profit. You find it by dividing your selling price by the money left from each order after the product cost, shipping and fees. A £50 product that leaves £20 after costs has a break-even ROAS of 2.5x.
The same number, the money left from each order, is also your break-even CPA: the most you can pay Meta for one sale before you lose money on it.
One order
Break-even ROAS
1.92x
Below this, every sale from an ad loses money.
Break-even CPA
£25.99
The most you can pay for one sale and still break even.
Contribution margin
52.0%
£25.99 left from each order before ad spend.
Target ROAS
2.70x
The ROAS you need to keep 15% of the price as profit.
Break-even ROAS = price / (price minus product cost, shipping and fees). Target ROAS = 1 / (margin minus the profit you want to keep). Worked out in your browser.
The formulas
Contribution per order = price minus product cost, shipping and packing, and payment or platform fees.
Break-even ROAS = price / contribution per order. Break-even CPA = contribution per order.
Target ROAS = 1 / (contribution margin minus the profit margin you want to keep). If your contribution margin is 45% and you want to keep 15% of the price as profit, you need a ROAS of 1 / 0.30, which is 3.33x.
Why it changes your decisions
Most brands judge ads against a ROAS target someone read online. The only target that matters is yours. Once you know it, you can switch off ads that look fine but lose money, and keep ads that look low but clear your margin.
It also shows where the easiest win is. Cutting fulfilment cost or raising the price lowers your break-even ROAS without touching the ads. Better creative raises the ROAS you achieve. Both close the gap.
Frequently asked questions
- How do I calculate break-even ROAS?
- Divide your selling price by what is left from each order after product cost, shipping and fees. You can also take 1 divided by your contribution margin as a decimal.
- What is break-even CPA?
- The most you can spend on ads to win one sale without losing money on that order. It equals the money left from the order after all costs except advertising.
- Should I include returns in the costs?
- Yes, if returns are common in your category. Add your average refund cost per order to the product cost to get a more honest break-even.
- What target ROAS should I set?
- Start from your break-even ROAS and add the profit margin you want to keep. The calculator does this for you: set the profit you want to keep and read the target ROAS.