Break-even ROAS Calculator
Find the lowest return on ad spend you can accept before a sale starts losing money.
- Break-even CPA
- $25.00
- Break-even ACoS
- 50%
- Margin before ads
- 50%
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How to use the break-even ROAS calculator
- Enter the selling price the customer pays per order.
- Enter your product cost and all other costs per order, like shipping, payment and platform fees, and packaging.
- Read your break-even ROAS, CPA and ACoS. Any ROAS above this number is profit.
Break-even ROAS formula
The thinner your margin, the higher the ROAS you need. If costs are higher than the price, no ROAS can break even.
Example
A product sells for 50, costs 15 to make and 10 to ship and process. Profit before ads is 25. Break-even ROAS is 50 ÷ 25 = 2.0×, so every 1 spent on ads must bring at least 2 in sales. Break-even CPA is 25 and break-even ACoS is 50%.
What is a good ROAS?
A good ROAS is one above your break-even point with room for profit. Many ecommerce brands aim for 1.5 to 2 times their break-even ROAS. Returning customers can justify a lower first-order ROAS if lifetime value is high.
ROAS, CPA and ACoS explained
ROAS is revenue divided by ad spend. CPA is the ad cost to win one order. ACoS, used on Amazon, is ad spend divided by revenue, the inverse of ROAS. All three tell the same story from different angles.
Frequently asked questions
How do I calculate break-even ROAS?
Divide the selling price by your profit per order before ad spend.
What costs should I include?
Include product cost, shipping, payment and marketplace fees, and packaging. Leave out ad spend, since that is what ROAS measures.
What does a break-even ROAS of 3× mean?
You must earn 3 in sales for every 1 spent on ads just to cover costs. Below 3×, ads lose money.
How is ACoS related to ROAS?
ACoS is 1 divided by ROAS, shown as a percent. A ROAS of 4× equals a 25% ACoS.
Why is my break-even ROAS so high?
Your margin before ads is thin. Raise prices, lower costs or increase order value to bring it down.
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