Break-even ROAS calculator
Enter your average order value and what each order costs you. You'll get the lowest ROAS that still makes money, and the most you can pay per order.
Formula
Break-even ROAS = 1 ÷ margin per order
Margin per order is the order value minus product cost, shipping and fees, divided by the order value. Ad spend isn't in it, because that's what the ROAS has to pay for.
New to the term? Read what ROAS means in the glossary.
How to calculate break-even ROAS: a worked example
A coffee store's average order is $60. The coffee costs $18, and shipping plus payment fees add $8.
- Margin per order = $60 − $18 − $8 = $34
- As a share of the order: $34 ÷ $60 = 56.7%
- Break-even ROAS = 1 ÷ 56.7% = 1.76x
Any campaign under 1.76x loses money on the first order. The most this store can pay per order is $34.
What ROAS should you aim for?
Break-even is the floor, not the goal. Rent, salaries and software come out of what's left above it, so aim for a ROAS that leaves a slice of revenue as profit.
To keep a set share of revenue as profit, divide 1 by your margin minus that share. The coffee store above needs 1 ÷ (56.7% − 10%) = 2.14x to keep 10% of sales.
| Margin per order | Break-even ROAS | ROAS to keep 10% as profit |
|---|---|---|
| 20% | 5.00x | 10.00x |
| 30% | 3.33x | 5.00x |
| 40% | 2.50x | 3.33x |
| 50% | 2.00x | 2.50x |
| 60% | 1.67x | 2.00x |
| 70% | 1.43x | 1.67x |
| 80% | 1.25x | 1.43x |
Questions about break-even ROAS
- What is break-even ROAS?
- Break-even ROAS is the return on ad spend at which ads pay for themselves and nothing more. It equals 1 divided by your margin per order, so a 50% margin breaks even at 2x and a 25% margin at 4x.
- Should I count repeat purchases?
- Only if you can wait for them. First-order break-even tells you whether ads pay back now. If customers reliably reorder, you can accept a lower first-order ROAS, but check it against real repeat rates from your order history.
- Is break-even ROAS the same as break-even CPA?
- They describe the same line. Break-even CPA is the margin per order in dollars, the most you can pay to win one order. Break-even ROAS is the order value divided by that amount.
Do it with Replo
Flag campaigns under break-even daily
Tell Replo your margin and it checks every campaign against break-even ROAS each morning.
Prompt: “flag campaigns below 1.8x ROAS every morning”