Best Practice Media · Free marketing tools

ROAS & Break-Even Calculator

Calculate ROAS from revenue and advertising spend, then compare it with the break-even and target-margin thresholds your order economics need.

Calculate return on ad spend.

Start with your own revenue and ad spend. The starting $10,000 / $2,500 example produces 4.00× ROAS.

Your revenue-to-spend ratio.

Calculated ROAS—Revenue returned per dollar of advertising.

ROAS as a percentage—Example: 4.00× is 400%.

Same-period ratio
Attributed revenue	—
Advertising spend	—
Revenue less ad spend	—

Revenue less advertising is not profit: product, fulfillment, fees and overhead are still outside this calculation. Reported attribution is not proof of incremental sales.

This sends the positive calculated ROAS to the scenario below. Update those order-cost inputs separately.

Build your scenario.

All starting values are illustrative examples. Replace them with your own figures. USD is used throughout.

01 · Your order economics

Net revenue per order ($)After discounts and refunds; exclude sales tax. Use the same revenue basis as your ROAS reporting.

Landed product cost per order ($)Include product cost and inbound freight.

Fulfillment per order ($)Seller-paid shipping, packaging and handling.

Effective transaction fees (%)Payment, marketplace or commission fees as a percentage of the modeled net revenue.

Other costs per order ($)Expected return losses and other costs not already included.

Allocated fixed costs per order ($)Monthly fixed costs ÷ expected monthly orders. Enter 0 to model variable-cost contribution only.

02 · Your target and scenario

Desired margin after advertising (%)Share of revenue you want left after all entered costs and advertising.

Scenario ROAS (×)Example: enter 3 for $3 of revenue per $1 of advertising.

No signup required. These calculators process your entries in your browser; the calculator does not send or save your input values.

Your ROAS thresholds.

Break-even ROAS—Covers the costs included in this model.

ROAS for your desired margin—Leaves your chosen share of revenue after ads.

Break-even ad cost per order—Ceiling at the modeled average order value.

Scenario contribution per order—After advertising and the costs you entered.

Per-order economics
Net revenue	—
Product cost	—
Fulfillment	—
Transaction fees	—
Other order costs	—
Allocated fixed costs	—
Contribution before advertising	—
Ad cost at scenario ROAS	—
Contribution after advertising	—

Margin before advertising: —. Scenario margin after advertising: —. Ad cost per order allowed for your desired margin: —.

This threshold assumes the same average order economics and revenue definition. Reported ROAS does not establish incremental sales or business-wide profit.

ROAS formula: revenue divided by ad spend.

For example, $10,000 of attributed revenue divided by $2,500 in advertising equals 4.00× ROAS, or 400%. At zero ad spend the ratio is undefined. At zero attributed revenue and positive ad spend it is zero.

Google Ads explains conversion value per cost in its Target ROAS documentation. Use revenue if you want a revenue-based ROAS. A platform conversion value may instead represent profit or assigned lead values, and can include modeled or overlapping attribution. Reconcile the definitions before comparing it with net-order margins.

How to calculate break-even ROAS.

Break-even ROAS is the revenue-to-ad-spend ratio needed to cover the costs included in your model. Calculate the margin available before advertising, then divide one by that margin expressed as a decimal. A 50% available margin gives a 2.00× break-even ROAS.

Break-even ROAS = 1 ÷ margin before advertising.
ROAS for desired margin = 1 ÷ (margin before advertising − desired margin after advertising).
Both formulas require a positive denominator.

Why product margin alone is incomplete

This calculator includes fulfillment, effective transaction fees, other order costs and an optional fixed-cost allocation alongside product cost. Every additional cost reduces the money available for advertising. Using gross product margin alone can understate the threshold you need.

A worked example

A $100 net order with $35 product cost, $8 fulfillment, $3 transaction fees, $2 other costs and $2 allocated fixed costs leaves $50 before advertising. Break-even ROAS is 2.00×. To retain a 10% margin after advertising, ad cost must stay at or below $40 per order, giving a 2.50× target. At 3.00× ROAS, ad cost is $33.33 and contribution is $16.67 per order. These are teaching inputs, not client results.

Shopify explains the reciprocal-margin relationship in its target ROAS guide. This tool extends the input list so you can include additional order costs and an explicit fixed-cost allocation.

Is break-even ROAS the same as a profitable ROAS?

Break-even leaves nothing after the included costs. Use the desired-margin field to model a cushion. If costs are missing, even the displayed target can overstate actual profitability.

Does this tell me what to set in Meta or Google Ads?

It is an economics threshold, not an automatic bidding recommendation. Reconcile net revenue, refunds, attribution and customer mix with the platform’s revenue reporting before applying it. Campaigns can report overlapping revenue.

What if my desired margin is too high?

If your desired margin equals or exceeds the margin available before advertising, no finite ROAS can achieve it with positive ad spend. Improve economics or change the target; the calculator will show that constraint.

Can I include repeat purchases or lifetime value?

This version models an average order. It does not assume future repeat purchases. Model customer lifetime value separately using observed retention, contribution and payback timing before accepting first-order losses.

Read the profitable ROAS guide · Explore paid social management · Explore paid search management · Model TikTok Shop economics

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