Break-Even ROAS Calculator
Break-Even ROAS is the return on ad spend a campaign needs to hit before it's profitable at all, based on gross margin rather than a flat number like 1.0.
Break-Even ROAS
What This Means
At a 56.7% gross margin ($34.00 profit per order), every $1 spent on ads needs to generate at least this much revenue just to break even. Running above 1.0 ROAS isn't enough, this is the real floor.
Want the full picture, not just this one number?
The Formula
Break-Even ROAS = 1 / ((AOV − COGS − Shipping − Payment Fees) / AOV)
Same formula as 1 divided by gross margin, just computed from per-order costs instead of a pre-known margin percentage, so the threshold updates the moment a shipping or fee cost changes.
Why It Matters
Treating any ROAS above 1 as profitable is a common, expensive mistake, since it ignores what the product itself costs to deliver. Building the margin from AOV and per-order costs directly, rather than a single blended percentage, also shows which cost line is actually pushing the break-even threshold up when it changes.
Example
A product sells at a $60 AOV, with $18 in COGS, $6 in shipping, and $2 in payment processing per order, a 56.7% gross margin. Break-even ROAS is 1 divided by 0.567, which equals about 1.76. A campaign running below that is losing money on every dollar spent, even if the ROAS number itself still looks positive.
Frequently Asked Questions
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