Breakeven ROAS Calculator
Calculate the minimum return on ad spend (ROAS) required to cover your costs and start making a profit.
Your Breakeven ROAS
1.75
Breakeven ACoS
57.00%
Your Unit Economics
The final price the customer pays.
Cost to produce or acquire one unit.
Includes packaging, shipping, and handling.
Payment gateway fees (e.g., Stripe, Shopify).
For businesses with repeat purchases (e.g., subscriptions).
Your Guide to E-commerce Profitability & ROAS
Welcome to your new command center for profitability. This isn't just a calculator; it's a strategic tool designed for ambitious e-commerce entrepreneurs, dropshippers, and performance marketers. Understanding your Break-Even Return On Ad Spend (ROAS) is the first step toward building a truly scalable and profitable online business. Let's dive in.
What Exactly is Break-Even ROAS?
Think of Break-Even ROAS as your business's survival number. It’s the minimum return you need on your ad spend to cover all your costs for a specific product, resulting in $0 profit and $0 loss.
If your Break-Even ROAS is 2.5, it means for every $1 you spend on ads, you need to generate $2.50 in revenue just to break even. Any return above 2.5x is pure profit. Any return below it is a loss. For Meta Ads marketers, this is your baseline KPI for campaign viability.
Step 1: Nailing Your Unit Economics
Accurate calculation starts with accurate data. Before you can trust your ROAS target, you must master your unit economics. Let's break down the inputs for this calculator:
- Selling Price: This is the final price a customer pays for one unit of your product. Simple.
- Cost of Goods Sold (COGS): For dropshippers, this is what you pay your supplier for the product. For brand owners, it includes manufacturing and material costs. Be precise.
- Shipping & Fulfillment: The total cost to get the product to your customer's door. Include packaging, postage, and any fulfillment center fees (e.g., CJ Dropshipping, Zendrop).
- Transaction Fees: The unavoidable cost of getting paid. This includes fees from platforms like Shopify Payments or Stripe (typically around 2.9% + $0.30).
2.0x ROAS
Ad Spend: $50.00
$7.00
Net Profit / Sale
3.0x ROAS
Ad Spend: $33.33
$23.67
Net Profit / Sale
4.0x ROAS
Ad Spend: $25.00
$32.00
Net Profit / Sale
5.0x ROAS
Ad Spend: $20.00
$37.00
Net Profit / Sale
8.0x ROAS
Ad Spend: $12.50
$44.50
Net Profit / Sale
10.0x ROAS
Ad Spend: $10.00
$47.00
Net Profit / Sale
Step 2: Leveraging Lifetime Value (LTV)
Most marketers make the mistake of only calculating ROAS on the first purchase. This is a critical error for brands with repeat customers. By enabling the Lifetime Value Model, you shift from a short-term view to a long-term strategy.
If you know a customer buys from you 3 times on average, you can afford to acquire them at a loss on the first order, knowing you'll be highly profitable over their lifetime. This is how major brands dominate Facebook Ads—they are willing to pay more for a customer because they understand their LTV. Our calculator shows you exactly how much you can afford to spend on that first order to still be profitable long-term.
Step 3: From Calculation to Actionable Strategy
Now that you have your number, here’s how to use it to make money:
- Set Your Target ROAS: Your target ROAS in your Meta or TikTok ad campaigns should be significantly higher than your break-even point. If your break-even is 2.5, aim for a 3.5 or 4.0 to ensure healthy profit margins.
- Analyze Campaign Performance: Is an ad set or campaign below your break-even ROAS? It's underperforming. You either need to improve the creative and targeting or kill it to stop bleeding cash.
- Scale with Confidence: When you find an ad that consistently beats your target ROAS, you have found a winner. This is your green light to increase the ad spend confidently, knowing you are printing money.
Frequently Asked Questions
Break-Even Return On Ad Spend (ROAS) is the point where your revenue from advertising exactly covers your product and advertising costs. A ROAS above this number means you're profitable; below it means you're losing money.
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