How to use this calculator
- Enter your selling price: the average revenue per order, excluding VAT or sales tax.
- Add every variable cost per order: product cost, shipping, payment processing, marketplace fees, packaging and the share of revenue you lose to returns.
- Read your break-even ROAS. Set a target margin to see the ROAS and the maximum CPA you need to stay profitable. Copy the link to share the exact scenario.
Break-even ROAS formula
Break-even ROAS is calculated in three steps:
Profit before ads = Price − COGS − Shipping − Payment fees − Platform fees − Other costs − ReturnsMargin before ads = Profit before ads ÷ PriceBreak-even ROAS = 1 ÷ Margin before ads
The same numbers give you two related metrics. Break-even CPA equals your profit before ads: it is the most you can pay in ad spend per order without losing money (see the break-even CPA calculator for max CPC and repeat purchases). Break-even ACoS equals your margin before ads, because ACoS is simply 1 ÷ ROAS (see the ACoS calculator).
Many calculators subtract only the product cost. That overstates your margin and makes your break-even ROAS look lower than it really is, so this calculator lets you enter major costs that grow with each order. Fees are entered manually; defaults are examples, not current platform rates.
Worked example
You sell a product for $50. It costs $15 to make, $5 to ship, $1 to pack, and your card processor charges 2.9% + $0.30.
- Payment fee: $50 × 2.9% + $0.30 = $1.75
- Total costs before ads: $15 + $5 + $1.75 + $1 = $22.75
- Profit before ads: $50 − $22.75 = $27.25 (your break-even CPA)
- Margin before ads: $27.25 ÷ $50 = 54.5%
- Break-even ROAS: 1 ÷ 0.545 ≈ 1.83
If you want to keep a 20% profit margin after ads, your target ROAS is 1 ÷ (0.545 − 0.20) ≈ 2.90, and you can spend at most $17.25 in ads per order.
Break-even ROAS by profit margin
The lower your margin, the harder your ads have to work just to break even:
| Margin before ads | Break-even ROAS | Break-even ACoS |
|---|---|---|
| 20% | 5.00 | 20% |
| 25% | 4.00 | 25% |
| 30% | 3.33 | 30% |
| 40% | 2.50 | 40% |
| 50% | 2.00 | 50% |
| 60% | 1.67 | 60% |
Break-even ROAS vs target ROAS
Break-even ROAS is the floor, not the goal: at exactly that ROAS your ads pay for themselves and you keep nothing. To grow profitably, set a target ROAS that leaves the margin you want:
Target ROAS = 1 ÷ (Margin before ads − Target margin)
The target must be below your margin before ads. If it is not, no ROAS can reach it and the fix is on the cost or pricing side, not in the ad account. To plan a budget around a target, use the target ROAS calculator.
How to lower your break-even ROAS
Because break-even ROAS depends only on your margin, every margin gain lowers it:
- Raise average order value with bundles, volume discounts or free-shipping thresholds, so fixed costs per order are spread over more revenue.
- Lower product cost by negotiating with suppliers or ordering in larger batches.
- Cut shipping and fulfilment costs through carrier rates, lighter packaging or a different fulfilment setup.
- Reduce returns with clearer product pages, size guides and photos that set the right expectations.
- Test a higher price. Even a small price increase can lower break-even ROAS noticeably when margins are thin; the profit margin calculator shows the price you need for a given margin.
Frequently asked questions
What is break-even ROAS?
Break-even ROAS is the return on ad spend at which your advertising neither makes nor loses money. At that point, the profit from each ad-driven sale exactly covers what you spent on ads to get it. Any ROAS above it is profitable; any ROAS below it loses money.
Is BEROAS the same as break-even ROAS?
Yes. BEROAS is simply the abbreviation of break-even ROAS. You will also see it written as breakeven ROAS or ROAS break-even point.
How do you calculate break-even ROAS?
Divide 1 by your profit margin before ad spend. First subtract every variable cost of an order (product cost, shipping, payment fees, platform fees, packaging and returns) from the selling price to get profit before ads. Divide that by the selling price to get the margin, then take 1 ÷ margin. A 40% margin gives a break-even ROAS of 2.5.
What is a good ROAS for ecommerce?
There is no universal good ROAS, because it depends entirely on your margin. A store with a 60% margin breaks even at a ROAS of about 1.67, while a store with a 20% margin needs 5.0 just to break even. Start from your own break-even ROAS: anything above it is profitable, and your target ROAS should include the profit margin you want to keep.
What is the difference between break-even ROAS and target ROAS?
Break-even ROAS leaves you with zero profit after ad spend. Target ROAS is higher: it is the ROAS you need to keep a chosen profit margin after paying for ads. The formula is 1 ÷ (margin before ads − target margin). With a 50% margin and a 20% target, you need a ROAS of 1 ÷ 0.30 ≈ 3.33.
Should I include shipping and payment fees?
Yes. Every cost that grows with each order belongs in the calculation. Leaving out shipping, payment processing or marketplace fees overstates your margin, which makes your break-even ROAS look lower than it really is, so campaigns can appear profitable while actually losing money.
How is break-even ROAS related to ACoS?
ACoS (advertising cost of sales) is the inverse of ROAS: ACoS = 1 ÷ ROAS. Your break-even ACoS therefore equals your profit margin before ads. If your margin is 30%, you break even at a 30% ACoS, which is the same as a ROAS of about 3.33.
Should I use prices with or without VAT or sales tax?
Use your selling price excluding VAT or sales tax, because that tax is collected on behalf of the government and is not revenue you keep. Keep costs on the same basis. Note that ad platforms often report conversion value including tax, so check which figure your ROAS is based on before comparing it with your break-even ROAS.
By the SellerUtils team · Last updated October 1, 2026. Results are estimates for planning and are not financial advice.