Break-even ROAS calculator

Break-even ROAS is the return on ad spend where revenue exactly covers the cost of the product — 1 ÷ gross margin. Enter your price and cost to get your exact number, plus the higher ROAS you need to hit a target profit margin on top.

Break-even ROAS calculator

—Gross margin
—Break-even ROAS
—Target ROAS

"Cost per order" is whatever it actually costs you to fulfil one — product cost plus pack/ship and payment processing if you want a stricter number. Leave target profit margin blank to see break-even only.

Break-even ROAS = 1 ÷ gross margin.

A $60 product that costs $21 to fulfil has a 65% gross margin. 1 ÷ 0.65 = 1.54x — at that ROAS, the revenue from the ad exactly covers the cost of the product, with nothing left for ad spend itself. Below 1.54x, that sale lost money. Above it, every extra bit of ROAS is closer to actual profit.

That's why "break-even" is a floor, not a target — it's the point where you've covered cost of goods, not where you've covered the ad spend that brought the sale in. A 1.54x ROAS pays for the product but not the ad. To also cover the ad spend and walk away with an actual profit margin, you need more room above break-even, which is what the target-profit field above adds: pick a profit margin you want left over after everything, and it raises the required ROAS accordingly.

This is also why break-even ROAS varies so much by category. A supplement or beauty brand at 70-80% margin might break even around 1.3-1.4x. A brand selling lower-margin hardware at 25% margin needs 4x just to break even — the same ROAS number means something completely different depending on what's behind it. Check where your actual ROAS lands with the ROAS calculator.

Put this number to work.

Questions about break-even ROAS

Does break-even ROAS include ad spend itself?
No — that's the part that trips people up. Break-even ROAS is the point where revenue covers the cost of goods sold. It doesn't yet account for the ad spend that generated the sale, so it's a floor below which you're definitely losing money, not a target to aim for.
What should I use for 'cost per order'?
At minimum, the direct product cost (COGS). For a stricter, more realistic number, add packaging, shipping you absorb, and payment processing fees (typically 2.5-3% of the sale) — anything that's a direct, variable cost of that specific order. Leave out fixed costs like rent or salaries; those aren't part of a per-order break-even calculation.
What's a realistic target profit margin to enter?
It depends on the business — there's no universal number. Many DTC brands work toward a 10-20% net margin after all costs, but that varies hugely by category, stage and how much is being reinvested in growth. Enter whatever margin you're actually trying to hit.
Why is my break-even ROAS higher than I expected?
Usually a thinner margin than assumed. If cost per order is close to selling price, break-even ROAS climbs fast — at a 20% margin it's 5x, and at 10% it's 10x. Double-check that cost per order includes everything it should, since an incomplete cost figure understates how much ROAS you actually need.

Know which mentions turn into sales, not just which ads do.

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