Break Even ROAS Calculator
Calculate your minimum ROAS needed for profitable advertising. Free online tool for e-commerce, dropshipping, and digital marketers.
Break Even ROAS Matrix
Blue = achievable (≤ 1.35 target), Red = challenging (> 1.35 target)
Price ↓Cost → | 6.50 | 9.39 | 12.28 | 15.17 | 18.06 | 20.94 | 23.83 | 26.72 | 29.61 | 32.50 |
|---|---|---|---|---|---|---|---|---|---|---|
| 22.50 | 1.41 | 1.72 | 2.20 | 3.07 | 5.07 | 14.42 | -16.92 | -5.33 | -3.16 | -2.25 |
| 26.00 | 1.33 | 1.57 | 1.90 | 2.40 | 3.27 | 5.14 | 11.98 | -36.11 | -7.20 | -4.00 |
| 29.50 | 1.28 | 1.47 | 1.71 | 2.06 | 2.58 | 3.45 | 5.20 | 10.61 | -268.18 | -9.83 |
| 33.00 | 1.25 | 1.40 | 1.59 | 1.85 | 2.21 | 2.74 | 3.60 | 5.25 | 9.73 | 66.00 |
| 36.50 | 1.22 | 1.35 | 1.51 | 1.71 | 1.98 | 2.35 | 2.88 | 3.73 | 5.30 | 9.13 |
| 40.00 | 1.19 | 1.31 | 1.44 | 1.61 | 1.82 | 2.10 | 2.47 | 3.01 | 3.85 | 5.33 |
| 43.50 | 1.18 | 1.28 | 1.39 | 1.54 | 1.71 | 1.93 | 2.21 | 2.59 | 3.13 | 3.95 |
| 47.00 | 1.16 | 1.25 | 1.35 | 1.48 | 1.62 | 1.80 | 2.03 | 2.32 | 2.70 | 3.24 |
| 50.50 | 1.15 | 1.23 | 1.32 | 1.43 | 1.56 | 1.71 | 1.89 | 2.12 | 2.42 | 2.81 |
| 54.00 | 1.14 | 1.21 | 1.29 | 1.39 | 1.50 | 1.63 | 1.79 | 1.98 | 2.21 | 2.51 |
Profitability Analysis
Profitable but Above Target
Your break-even ROAS of 1.41 is above your target of 1.35, but you are still profitable with $32.00 profit per unit (71.1% margin).
You can still run profitable ads, but you will need to achieve a higher ROAS than your target. Consider improving margins for easier scaling.
ROAS Targets for Profitability
Break Even
1.41
0% profit
10% Profit
1.55
Target ROAS
20% Profit
1.69
Target ROAS
30% Profit
1.83
Target ROAS
Quick Tips to Lower BEROAS
- • Increase selling price by 10% → reduces BEROAS by ~9%
- • Reduce product cost through bulk ordering or negotiation
- • Minimize return rate with better product photos and descriptions
- • Consider LTV-based targeting if you have repeat customers
About This Free Break Even ROAS Calculator
Our Break Even ROAS Calculator is a free online tool designed for e-commerce business owners, dropshippers, and digital marketers who want to understand their advertising profitability. BEROAS (Break Even Return on Ad Spend) tells you the minimum ROAS your ad campaigns need to achieve to cover all costs without losing money.
What Does This Calculator Do?
- Calculates your Break Even ROAS - The minimum ROAS needed to avoid losses on your ad spend
- Shows profit margin analysis - Understand how your costs affect your margins
- Generates a visual ROAS matrix - See how different price and cost combinations impact your break even point
- Provides actionable recommendations - Get specific suggestions to improve your profitability
- Supports LTV calculations - Account for customer lifetime value in advanced mode
How to Use This Calculator
- Enter your product selling price - The price customers pay for your product
- Enter your product cost (COGS) - Your cost of goods sold including manufacturing or wholesale cost
- View your Break Even ROAS - The calculator instantly shows your minimum required ROAS
- Check the ROAS matrix - Explore different scenarios and download as Excel/CSV
- Review recommendations - Get actionable tips to improve your margins
Advanced Calculator Features
For more accurate calculations, switch to our Advanced Calculator which includes:
Cost Factors
- - Shipping costs
- - Packaging costs
- - Transaction fees (Stripe/PayPal)
- - Platform fees (Shopify/Amazon)
Business Factors
- - Return rate percentage
- - Discount rate
- - Customer repurchase rate
- - LTV-based ROAS calculation
Why Break Even ROAS Matters
Without knowing your Break Even ROAS, you might think your ad campaigns are profitable when they are actually losing money. A 3x ROAS might be excellent for a high-margin supplement brand but devastating for an electronics retailer with thin margins. This calculator helps you understand your specific break even point so you can make informed decisions about your advertising budget.
Important Note: Break Even ROAS only accounts for variable costs associated with each sale. It does not include fixed overhead costs like salaries, rent, or software subscriptions. Factor these into your overall profitability analysis.
Industry Benchmarks
| Industry | Avg Margin | Break Even ROAS | Target ROAS |
|---|---|---|---|
| Health & Supplements | 60% | 1.67 | 2.5-3.5 |
| Jewelry & Accessories | 55% | 1.82 | 2.5-3.5 |
| Apparel & Fashion | 40% | 2.50 | 3.5-4.5 |
| Home & Garden | 35% | 2.86 | 4.0-5.0 |
| Consumer Electronics | 20% | 5.00 | 6.0-8.0 |
Frequently Asked Questions
Everything you need to know about Break Even ROAS
Break Even ROAS (Return on Ad Spend) is the minimum ROAS you need to achieve to cover all your costs without making a profit or loss. It tells you the point where your advertising spend equals your revenue minus all associated costs.
Example: For example, if your profit margin is 40%, your Break Even ROAS is 2.5 (1 / 0.40 = 2.5). This means for every $1 spent on ads, you need to generate $2.50 in revenue just to break even.
The formula for Break Even ROAS is: Break Even ROAS = 1 / Profit Margin. Alternatively, you can calculate it as: Selling Price / (Selling Price - Total Costs). Your total costs should include product cost, shipping, transaction fees, platform fees, and any other variable costs.
Example: If you sell a product for $50 and your total cost is $30, your profit is $20 and profit margin is 40%. Break Even ROAS = $50 / $20 = 2.5
A "good" Break Even ROAS depends on your industry and business model. Generally, a lower Break Even ROAS is better as it gives you more room for profitable advertising. A Break Even ROAS below 2.0 is excellent, 2.0-3.0 is good, 3.0-4.0 is acceptable, and above 4.0 may be challenging for paid advertising.
Example: A supplement brand with 60% margins has a Break Even ROAS of 1.67, making it easy to run profitable ads. An electronics retailer with 20% margins needs a 5.0 ROAS just to break even, which is much harder to achieve.
ROAS (Return on Ad Spend) measures the actual revenue generated per dollar spent on advertising. Break Even ROAS is the minimum ROAS threshold needed to cover costs. If your actual ROAS is higher than your Break Even ROAS, you are profitable. If it is lower, you are losing money on ads.
Example: If your Break Even ROAS is 2.5 and your campaign achieves 3.5 ROAS, you are profitable. If the same campaign only achieves 2.0 ROAS, you are losing money on each sale.
Profit margin and Break Even ROAS have an inverse relationship. Higher profit margins result in lower Break Even ROAS, giving you more flexibility in advertising. Lower margins require higher ROAS to be profitable, making it harder to scale ads.
Example: A 50% margin = 2.0 Break Even ROAS, a 33% margin = 3.0 Break Even ROAS, and a 20% margin = 5.0 Break Even ROAS.
Yes, you should include all variable costs in your Break Even ROAS calculation for accuracy. This includes shipping costs, packaging, transaction fees (like Stripe or PayPal fees), platform fees, and any other per-order costs. Excluding these will give you an artificially low Break Even ROAS.
Example: A $50 product with $15 product cost, $5 shipping, and $2 transaction fees has total costs of $22, not just $15. Your accurate Break Even ROAS is $50/$28 = 1.79, not $50/$35 = 1.43.
LTV (Lifetime Value) based Break Even ROAS accounts for repeat purchases. If customers buy multiple times, you can accept a higher Break Even ROAS on the first purchase because you will make profit on subsequent purchases without additional ad spend.
Example: If your Break Even ROAS is 2.5 but customers average 3 purchases, your LTV-based Break Even ROAS is 2.5 / 3 = 0.83. You can afford to lose money on the first sale and still be profitable overall.
You should recalculate your Break Even ROAS whenever any cost factor changes: supplier prices, shipping rates, platform fees, or when you change your selling price or discount strategy. At minimum, review it monthly to ensure your campaigns remain profitable.
Example: If your shipping carrier increases rates by $2 per package, this directly impacts your Break Even ROAS. A product with 40% margin might drop to 35% margin, changing your Break Even ROAS from 2.5 to 2.86.
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