Work out break even roas instantly with clear inputs, formula shown and shareable results.
Break-even return on ad spend is the reciprocal of gross margin: at a 45% margin every unit of spend must return about 2.2 units of revenue. Adding a profit target raises the required return sharply.
Break-even ROAS
Break-even = 1 / gross margin; target = 1 / (gross margin - target margin)
Figures are estimates based on the inputs given. Marketing performance, platform fees and conversion behaviour vary by audience, channel and season. Use this as a planning guide, not a forecast.
Because each sale contributes little. A 20% margin needs a five-times return before advertising pays for itself.
Contribution margin, after fulfilment, payment fees and expected returns, is the more accurate basis.