Advertising Break Even ROAS
Free Advertising Break Even ROAS calculator with clear step-by-step results.
About Advertising Break Even ROAS
Finds the return on ad spend at which a campaign exactly pays for itself. Refunds are stripped from revenue, gross margin is applied and per-order fulfilment is deducted, leaving the contribution each order makes toward advertising. Break-even ROAS is the reciprocal of that contribution expressed as a share of order value.
Formulas
Contribution per order
Contribution = AOV x (1 - return rate) x gross margin - fulfilment cost
Break-even ROAS
Break-even ROAS = AOV / contribution per order
Worked example
With the default values below, Advertising Break Even ROAS returns Break-even ROAS of 2.84. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Average order valueminimum 0.01 $
- 80 $
- Gross margin on the orderaccepts 1–100 %
- 45 %
- Fulfilment / payment cost per orderminimum 0 $
- 6 $
- Return / refund rateaccepts 0–60 %
- 5 %
Results
- Break-even ROAS
- 2.84 x
- Contribution per order
- $28.20
- Maximum CPA before you lose money
- $28.20
- Contribution margin
- 35.25% %
Step by step
- 1Values used
- 2Contribution per order
- 3Break-even ROAS
- 4Break-even ROAS= 2.84 x
- 5Contribution per order= $28.20
- 6Maximum CPA before you lose money= $28.20
- 7Contribution margin= 35.25 %
Assumptions and limits
- The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax or compounding frequency into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
Is break-even ROAS the same as my target ROAS?
No. Break-even is the floor - at that number you make zero profit. Targets are usually set well above it so the channel funds overhead and growth.
Why does a higher margin lower break-even ROAS?
More of each sale is left over to pay for advertising, so you can afford to spend more per dollar of revenue and still come out even.