Break-Even ROAS Calculator
Find out the exact minimum ROAS required to cover your costs before launching ad campaigns.
How the Break-Even ROAS Calculator Works
To run a profitable e-commerce business, tracking front-end ad performance alone is not enough. This calculator bridges your advertising goals with real unit economics, so you account for product cost, shipping, and payment gateway fees before you spend a dollar on ads.
Enter your selling price and your per-order costs. The tool subtracts those costs from the price to get your gross margin per order, then divides the price by that margin to show the ROAS you need just to break even. It also shows the maximum you can pay to acquire one order (Max CPA) and a Target ROAS that leaves a 20% profit on the selling price.
Key Formulas Behind This Tool
- Total Unit Cost: Product Cost + Shipping + Gateway Fees
- Gross Margin per Order: Selling Price - Total Unit Cost
- Break-Even ROAS: Selling Price / Gross Margin per Order
- Target ROAS (20% profit): Selling Price / (Gross Margin per Order - 20% of Selling Price)
- Max Allowable CPA: Equal to Gross Margin per Order (when positive)
Frequently Asked Questions (FAQ)
Why is Break-Even ROAS higher when shipping and fees increase?
Every dollar spent on fulfillment or transaction processing reduces your gross margin. As gross margin shrinks, your ad campaigns must generate a higher return just to break even.
What is the difference between Break-Even ROAS and Target ROAS?
Break-Even ROAS is the minimum efficiency where your profit is exactly $0.00. Target ROAS includes your required profit buffer (here, 20% of the selling price) so your business stays cash-flow positive.
What is a good ROAS for e-commerce?
It depends on your margins. A product with a 50% margin breaks even at 2.0x, while a product with a 25% margin breaks even at 4.0x. Any ROAS above your break-even number is profitable on the first order.
What does Max Allowable CPA mean?
Max Allowable CPA is the most you can pay in ads to acquire one order without losing money. It equals the gross margin per order after product cost, shipping, and fees.