Free tool
Break-even ROAS calculator: the ROAS and CPA where your ads stop losing money
Convertica's free break-even ROAS calculator builds the number from one order: selling price, discount, product cost, shipping, payment fees, other variable costs and refunds. It returns your contribution margin, your break-even ROAS (also written breakeven ROAS or BEROAS), your break-even CPA and the target ROAS for the profit you want to keep. It works in any currency.
Short answer
A break-even ROAS calculator finds the return on ad spend at which an order's contribution margin exactly pays for the ads that won it. Break-even ROAS is revenue per order divided by what the order leaves after product, shipping, payment fees and refunds, which equals 1 divided by your contribution margin percentage.
- Break-even ROAS is revenue per order divided by contribution margin per order, or 1 divided by the contribution margin as a share of revenue.
- The contribution margin per order is also your break-even CPA: the most you can pay in ads to win one order.
- Discounts and refunds raise break-even ROAS quickly, because they cut revenue while most costs stay the same.
- Break-even is the floor, not the goal. A target ROAS takes the profit you want to keep out of the margin first.
- No ROAS is good in general. A campaign is good when it clears your own line, and conversion rate decides whether it does.
Break-even ROAS calculator
Free to use, no sign-up. Any currency, as long as every amount uses the same one. Enter amounts without sales tax or VAT. The result updates as you type.
Break-even ROAS
2.50x
Variable costs per order: 60.00 product + 15.00 shipping + 5.00 payment fees + 10.00 other costs = 90.00.
Contribution margin: 150.00 - 90.00 = 60.00 per order, 40% of revenue. That is your break-even CPA: the most you can pay in ads to win one order.
Break-even ROAS: 150.00 ÷ 60.00 = 2.50, or 250%. Ads must bring in 2.50 of revenue for every 1 they cost to pay for themselves.
To keep 15.00 per order (10% of revenue), ads can cost up to 45.00 per order: target ROAS 150.00 ÷ 45.00 = 3.33 (333.3%).
At your ROAS of 3.00, ads cost 150.00 ÷ 3.00 = 50.00 per order, so each order keeps 10.00 after ads. You are above break-even. That is short of your target ROAS of 3.33.
Formula
revenue per order = selling price * (1 - discount)
variable costs = product + shipping + payment fees + other + refunds
contribution margin = revenue per order - variable costs
break-even ROAS = revenue per order / contribution margin
break-even CPA = contribution margin
target ROAS = revenue per order / (contribution margin - profit to keep)Break-even ROAS from your margin
Already know your margin as a percentage? This is the short way to the same answer.
Break-even ROAS
2.50x
1 ÷ 40% margin = 2.50, or 250%. Each 1 of revenue leaves 0.40 before ads, so ads must bring in 2.50 for every 1 they cost.
Break-even ACoS is the margin itself: ads can take up to 40% of the revenue they bring in.
To keep 10% of revenue as profit, ads can take 30%: target ROAS 1 ÷ 30% = 3.33 (333.3%).
On an order of 150.00, break-even CPA is 150.00 × 40% = 60.00, and the target CPA is 45.00.
Formula
break-even ROAS = 1 / contribution margin
break-even ACoS = contribution margin
target ROAS = 1 / (contribution margin - profit to keep)
break-even CPA = average order value * contribution marginWhat is break-even ROAS?
Break-even ROAS is the return on ad spend at which the money an order leaves, after its own costs, exactly pays for the ads that won it. Below that figure every order the ads bring in loses money. Above it every order adds profit. It is also written breakeven ROAS, or BEROAS for short.
ROAS on its own counts revenue, not profit, so the same ROAS can make one store money and lose it for another. Break-even ROAS is the line that tells them apart, and it comes from your prices and costs, not from your ad account. For the metric itself, see ROAS meaning and the ROAS calculator.
How to use the break-even ROAS calculator
- Enter the selling price. One product's price, or your average order value for a whole store or campaign, without sales tax. Add the average discount if your ads carry a code.
- Enter what the order costs you. The product, shipping and fulfillment, the payment fee as a percentage and a fixed amount, and anything else you pay per order.
- Add your refund rate. The share of revenue you hand back. Leave it empty if refunds are rare.
- Read the result. Contribution margin per order, break-even ROAS as a ratio and a percentage, and break-even CPA.
- Set a goal. Enter the profit you want to keep, as a share of revenue or an amount per order, to get a target ROAS and a target CPA.
- Compare. Enter the ROAS your ad platform reports to see what each order keeps or loses at that level.
What is the break-even ROAS formula?
The break-even ROAS formula is revenue per order divided by contribution margin per order. The contribution margin is what the order leaves after every cost that comes with it: product, shipping, payment fees, other per-order costs and refunds. With 150 of revenue and 60.00 left, break-even ROAS is 150 / 60.00 = 2.50.
break-even ROAS = revenue per order / contribution margin per order
= 1 / contribution margin as a share of revenueBoth lines are the same sum. 60.00 out of 150 is a 40% contribution margin, and 1 / 0.40 = 2.50. The first form is easier to build from real costs, and it gives you the break-even CPA on the way. The second is the shortcut when you already trust your margin percentage.
If the costs equal or exceed the revenue, there is no break-even ROAS. The order loses money before a cent is spent on ads, and no amount of ad efficiency fixes that. The calculator says so and prints no number.
How to calculate break-even ROAS: a worked example
To calculate break-even ROAS, add up what one order costs you, subtract that from what the order brings in, and divide the revenue by the difference. The numbers below are the default values in the calculator, made up to show the arithmetic. They are not a benchmark, and the payment fee is a round illustration, not any processor's rate.
- Revenue per order: 150.
- Payment fees: 150 × 0.03 + 0.50 = 5.00.
- Variable costs: 60 product + 15 shipping + 5.00 payment fees + 10 other = 90.00.
- Contribution margin: 150 - 90.00 = 60.00 per order, or 40% of revenue. That is the break-even CPA.
- Break-even ROAS: 150 / 60.00 = 2.50, or 250%.
- To keep 10% of revenue, which is 15.00 per order, ads can cost 60.00 - 15.00 = 45.00. Target ROAS: 150 / 45.00 = 3.33.
- At a ROAS of 3.00, ads cost 150 / 3.00 = 50.00 per order, so each order keeps 60.00 - 50.00 = 10.00. That is above break-even and short of the target.
The same order during a promotion
Now run the ads with a 10% discount code, and let 4% of revenue come back as refunds. Revenue drops to 135.00. Payment fees fall slightly to 4.55, refunds cost 5.40, and the product, shipping and other costs do not move, so the order costs 94.95 and leaves 40.05, a 29.67% margin.
Break-even ROAS is now 135.00 / 40.05 = 3.37, up from 2.50. The campaign that kept 10.00 per order at a ROAS of 3.00 now pays 45.00 in ads for an order that leaves 40.05, and loses 4.95 each time. Nothing changed in the ad account. Recalculate the line whenever a price, a cost or an offer changes.
Which costs go into break-even ROAS?
Break-even ROAS includes every cost that rises with each order and nothing else. Product, shipping, payment fees, packaging, discounts and refunds belong in it. Ad spend does not, because it is the thing being measured, and neither do fixed costs such as salaries and rent, which the profit above break-even has to pay for.
| Item | Include? | How to enter it |
|---|---|---|
| Product cost | Yes | The landed cost of the goods in an average order: what you pay the supplier plus freight and duty to get them to you. |
| Shipping and fulfillment | Yes | The part you pay: postage, pick and pack, packaging. If the customer pays for shipping, either add that charge to the price or enter only the part you absorb. |
| Payment fees | Yes | The percentage and the fixed amount per transaction from your own processor's pricing page or statement. |
| Other per-order costs | Yes | Inserts, per-order app fees, marketplace or affiliate commission. |
| Discounts | Yes | As a percentage off the price. A discount cuts revenue while most costs stay the same. |
| Refunds and returns | Yes | The share of revenue you refund. Add the cost of handling a return to other costs. |
| Sales tax or VAT | No | Leave it out of the price and the costs. It is collected for the government and is neither revenue nor cost. |
| Ad spend | No | It is what break-even ROAS is measured against. |
| Fixed costs | No | Salaries, rent, software subscriptions. Cover them with the profit goal, not the break-even line. |
Two inputs deserve a closer look. For the payment fee, the Stripe fee calculator and the PayPal fee calculator work out the fee on an order of your size. For the margin as a whole, the margin calculator turns a cost and a price into a margin percentage, and the profit calculator works out the profit itself.
The refund rate here assumes the worst case: the money goes back and the goods are written off, with the payment fee still paid. If returned goods go back into stock, your real cost is lower, so enter a lower rate.
Break-even ROAS vs target ROAS: what is the difference?
Break-even ROAS is the floor: the ads pay for themselves and leave nothing. Target ROAS is the floor plus the profit you want to keep, so it is always higher. With a 40% contribution margin, break-even ROAS is 2.50; keeping 10% of revenue as profit leaves 30% for ads, which makes the target 1 / 30% = 3.33.
The same order can be read four ways. They are one limit in different units, not four different tests:
| Limit | Formula | This order | Use it when |
|---|---|---|---|
| Break-even ROAS | Revenue per order / contribution margin | 2.50 (250%) | The ad platform reports revenue |
| Break-even CPA | Contribution margin per order | 60.00 | You judge campaigns by cost per purchase |
| Break-even ACoS | Contribution margin / revenue per order | 40% | The platform reports ad spend as a share of sales, as Amazon Ads does |
| Target ROAS | Revenue per order / (contribution margin - profit to keep) | 3.33 (333.3%) | You set a goal for automated bidding |
Google Ads takes a target ROAS as a percentage: its help center gives 500% as the target for 5 of sales per 1 of ad spend (About Target ROAS bidding). Amazon Ads states the same limit from the other side: to stay profitable, ACoS has to be lower than your profit margin (What is advertising cost of sales?). The CPA formula and calculator covers the cost-per-order view in full.
What each ROAS means for one order
A ROAS turns into money per order in one step: the ads cost the order's revenue divided by the ROAS, and the order keeps its contribution margin minus that.
| ROAS | As a percentage | Ad cost per order | Left per order after ads |
|---|---|---|---|
| 1.50 | 150% | 100.00 | -40.00 |
| 2.00 | 200% | 75.00 | -15.00 |
| 2.50 | 250% | 60.00 | 0.00 (break-even) |
| 3.00 | 300% | 50.00 | +10.00 |
| 4.00 | 400% | 37.50 | +22.50 |
| 5.00 | 500% | 30.00 | +30.00 |
Break-even ROAS and target ROAS only look at the order's own costs. For the return on everything you spent, fixed costs included, use the ROI calculator.
What is a good break-even ROAS?
There is no good break-even ROAS in general. It is not a result you achieve but a line your costs draw, and a lower line is simply easier to clear. That is why this page publishes no average or typical figure: another store's break-even says nothing about yours, and a campaign is good when it beats your own.
What you can do is move the line. Each row below changes one thing in the default order and leaves the rest alone:
| Change | Left per order | Contribution margin | Break-even ROAS | Change in break-even |
|---|---|---|---|---|
| Starting point | 60.00 | 40% | 2.50 | None |
| A 10% discount code | 45.45 | 33.67% | 2.97 | +0.47 |
| 4% of revenue refunded | 54.00 | 36% | 2.78 | +0.28 |
| Shipping costs 20, not 15 | 55.00 | 36.67% | 2.73 | +0.23 |
| Product cost 10% lower (54) | 66.00 | 44% | 2.27 | -0.23 |
| Price 10% higher (165) | 74.55 | 45.18% | 2.21 | -0.29 |
How to lower your break-even ROAS
- Discount less, or discount differently. A percentage off comes straight out of the contribution margin. A free gift or a bundle costs you its product cost, not its price.
- Cut refunds. Clearer product pages, sizing help and honest delivery times can reduce the orders that come back.
- Lower the cost of the goods or the shipping. A better supplier price or a cheaper shipping method helps every order, not only the ones from ads.
- Raise the price. A price rise adds to revenue and almost all of it reaches the contribution margin. Test it first, because conversion rate can fall.
- Raise order size. Costs that are charged once per order weigh less on a bigger order.
The last point, in numbers. An order of 30 with 12 of product, 5 of shipping and 1.40 in payment fees leaves 11.60, a 38.67% margin and a break-even ROAS of 2.59. Three of the same item in one order, at 90, with 36 of product, 6 of shipping and 3.20 in fees, leaves 44.80: a 49.78% margin and a break-even ROAS of 2.01. The product margin is the same. Only the order size changed.
Does conversion rate change break-even ROAS?
No. Conversion rate does not move break-even ROAS, because the line depends only on what an order brings in and what it costs. What conversion rate changes is the ROAS you actually get: at the same cost per click, a page that converts more visitors wins each order for less, which decides which side of the line a campaign lands on.
Take the default order again, with clicks at 1.80 each. Only the landing page's conversion rate changes:
| Landing page conversion rate | Ad cost per order (CPA) | ROAS | Each order |
|---|---|---|---|
| 2% | 90.00 | 1.67 | Loses 30.00 |
| 3% | 60.00 | 2.50 | Breaks even |
| 4% | 45.00 | 3.33 | Keeps 15.00 |
| 5% | 36.00 | 4.17 | Keeps 24.00 |
| 6% | 30.00 | 5.00 | Keeps 30.00 |
At a 1.80 click, this order breaks even once the page converts 3.00% of clicks, which is 1.80 divided by the 60.00 break-even CPA, and it reaches the 3.33 target ROAS at 4.00%. Below the first rate the campaign loses money at any budget. Above it the same ads, bids and budget make money. The CPC calculator turns this around and gives the most you can pay for a click at your conversion rate.
That is the part Convertica works on. To measure your rate, use the conversion rate calculator. To find what is holding it down, the free CRO audit checks the page your ads send people to: the first screen, calls to action, forms, trust, mobile, speed and AI agent readiness, ranked by likely impact.
Do repeat purchases change break-even ROAS?
Repeat purchases do not change the break-even ROAS of a single order, but they change how much you can afford to pay for a new customer. If customers come back and order again without more ad spend, the first order can run below its own break-even and the customer can still pay for the ads over time.
The arithmetic: with 0.5 repeat orders per new customer, each customer places 1.5 orders on average and leaves 60.00 × 1.5 = 90.00 before ads. A first-order ROAS of 150 / 90.00 = 1.67 then breaks even, against 2.50 on the first order alone.
Three conditions make that honest, and the calculator's repeat orders field assumes all of them:
- The repeat rate is measured. It comes from your own order history for customers won by ads, over a period you choose, not from a hoped-for figure.
- Repeat orders are not bought again. If you pay for retargeting or discounts to win the second order, its contribution is smaller.
- You can wait. At a ROAS of 1.67, the first order is 30.00 short of paying for its ads. That gap is cash you fund until the later orders arrive.
One more caution. The ROAS in an ad platform mixes new and returning customers, so a first-order target only applies to campaigns that reach new ones. To put a figure on later orders, use the customer lifetime value calculator. To see what a new customer costs once salaries, fees and tools are counted with the ad spend, use the CAC calculator.
Does the ROAS in your ad platform match your break-even ROAS?
Only when both use the same revenue. The break-even ROAS above is worked out on revenue without sales tax, after discounts, with refunds counted as a cost. The ROAS in an ad platform uses whatever conversion value your store sends it, credited by that platform's own attribution rules. Line the two up before you compare them.
- Tax in the conversion value. If the value your store reports includes sales tax or VAT, the platform's ROAS is higher by the tax. Send values without tax, or raise the line: with 20% VAT, a 150 order is reported as 180 and still leaves 60.00, so the figure to beat is 2.50 × 1.20 = 3.00.
- Refunds. Conversion value is usually recorded at checkout, before anything is sent back. That is why this calculator treats refunds as a cost and leaves the revenue as the platform sees it.
- Profit sent as the value. Google Ads Help describes conversion values as sales revenue or profit margins (About conversion values). If your store sends the profit on each order as the value, the line is 1, or 100%: every 1 of ad spend has to bring back 1 of profit.
- Fees on the ad spend. An agency fee charged as a share of ad spend makes every ad dollar cost more. With a 10% fee, compare the platform's ROAS with 2.50 × 1.10 = 2.75.
- Attribution. Each platform credits itself, so the revenue the platforms claim between them can add up to more than the store took. Keep some room above the line, and see why ROAS can mislead.
How to calculate break-even ROAS in Excel or Google Sheets
To calculate break-even ROAS in Excel or Google Sheets, put the order's numbers in one column, work out revenue, costs and contribution margin in the next three cells, and divide revenue by the margin. The formulas below work in both programs. Format the discount, fee and refund cells as percentages.
| To get | Cell | Formula |
|---|---|---|
| Revenue per order | B12 | =B2*(1-B3) |
| Variable costs | B13 | =B4+B5+B12*B6+B7+B8+B12*B9 |
| Contribution margin (break-even CPA) | B14 | =B12-B13 |
| Break-even ROAS | B15 | =IF(B14<=0,"",B12/B14) |
| Target ROAS | B16 | =IF(B14-B12*B10<=0,"",B12/(B14-B12*B10)) |
| Break-even ROAS from a margin percentage in B18 | B19 | =1/B18 |
The IF in the break-even row matters. When an order's costs match or exceed its revenue, the division gives an error or a negative ROAS, and a negative break-even ROAS is not a target. It means the order loses money before ads.
Common break-even ROAS mistakes
- Using product cost only. Shipping, payment fees and refunds are part of every order. Leave them out and the line looks lower than it is.
- One line for the whole store. Products with different margins have different break-even points. Work it out per product or per campaign where the margins differ.
- Mixing revenue definitions. A line worked out without tax, compared with a platform ROAS that includes it, makes losing campaigns look fine.
Related calculators
Break-even ROAS sits between two sets of numbers: the margin and cost figures that produce it, and the ad metrics you compare it with.
See all free tools and how they fit together.
Break-even ROAS calculator FAQ
How does a break-even ROAS calculator work?
A break-even ROAS calculator subtracts every cost that comes with an order from the revenue of that order, then divides the revenue by what is left. For example, a 150 order that costs 90 in product, shipping, fees and packaging leaves 60, so break-even ROAS is 150 / 60 = 2.5. The 60 is also the break-even CPA.
What is the break-even ROAS formula?
Break-even ROAS = revenue per order / contribution margin per order, where the contribution margin is revenue minus product cost, shipping, payment fees and other variable costs. Written with percentages it is 1 / contribution margin: a 40% margin gives 1 / 0.4 = 2.5, and a 25% margin gives 4.
What does BEROAS mean?
BEROAS stands for break-even return on ad spend, also written breakeven ROAS. It is the ROAS at which the money an order leaves after its own costs exactly pays for the ads that won it. Below it, each order the ads bring in loses money; above it, each one adds profit.
What is a good break-even ROAS?
There is no good break-even ROAS in general, only a lower or a higher one. It is set by your own prices and costs, not by your industry. A lower figure leaves more room, because more campaigns can clear it. To judge a campaign, compare its ROAS with your own break-even ROAS and target ROAS.
Which costs should I include in break-even ROAS?
Include every cost that rises with each order: the product, shipping and fulfillment, payment fees, packaging, per-order app or marketplace fees, discounts and the cost of refunds. Leave out ad spend, which is the thing being measured, and fixed costs such as salaries, rent and software, which the profit above break-even has to cover.
What is the difference between break-even ROAS and target ROAS?
Break-even ROAS is the floor at which ads pay for themselves and leave nothing. Target ROAS adds the profit you want: revenue per order divided by the contribution margin minus the profit kept. With 150 of revenue and a margin of 60, keeping 15 per order gives 150 / 45 = 3.33, against a break-even of 2.5.
What is break-even CPA?
Break-even CPA is the most you can pay in ads to win one order without losing money on it. It equals the contribution margin per order: revenue minus the order's variable costs. Break-even ROAS is the same limit seen from the revenue side: revenue per order divided by break-even CPA.
Is a 100% ROAS break-even?
No, unless your contribution margin is 100%. A 100% ROAS, or a ROAS of 1, means the ads brought in exactly what they cost in revenue, so each order still has to pay for its product, shipping and fees. ROI is different: it counts profit, so 0% ROI is break-even and 100% ROI means the profit equals the investment.
Should break-even ROAS include refunds and sales tax?
Refunds yes, tax no. Refunded revenue is money you hand back, so count the share of revenue you refund as a cost. Sales tax and VAT are collected for the government, so leave them out of the price and the costs. If your ad platform's conversion value includes tax, multiply the break-even ROAS by 1 plus the tax rate.
Do repeat purchases lower break-even ROAS?
Repeat purchases lower the ROAS a first order needs, not the break-even of a single order. If a new customer places 0.5 more orders on average with no further ad spend, each customer leaves 1.5 times the contribution, so a first-order ROAS of 2.5 / 1.5 = 1.67 breaks even once those orders arrive. Use measured repeat rates only.
How can I lower my break-even ROAS?
Raise the contribution margin on each order: a higher price, a lower product or shipping cost, fewer discounts and fewer refunds all lower break-even ROAS. Larger orders help when costs such as shipping do not grow as fast as the order. A better conversion rate does not move the line, but it lifts your actual ROAS above it.
How do I calculate break-even ROAS in Excel or Google Sheets?
Put revenue per order in B2 and total variable costs per order in B3, then enter =B2/(B2-B3). To leave the cell blank when costs match or exceed revenue, use =IF(B2<=B3,"",B2/(B2-B3)). From a contribution margin percentage in B4, the formula is =1/B4.