OnSumoTools

Break-Even ROAS Calculator

Find the minimum ROAS paid traffic must hit so each order covers COGS, logistics, and payment costs, before you layer in CAC.

100% client-side. Your inputs stay in this browser.

Dial in COGS, logistics, payment fees, and refunds, see the minimum ROAS required before fixed overhead and CAC.

Currency and formatting follow your selection; the ROAS math is the same everywhere.

Break-even ROAS

1.83×

ROAS @ 0% net target

1.83×

Gross margin

54.6%

Contribution / order

$54.63

Loading chart…

ROAS required by target net margin

Target net marginRequired ROAS
0%1.83×
5%2.01×
10%2.24×
15%2.52×
20%2.89×
$100.00
$30.00
$8.00
$4.00
$0.00
2.9%
$0.30
5.0%
0%

How does the Break-Even ROAS Calculator work step by step?

The calculator works from the order level, not the campaign level. It adds up every variable cost that applies to a single sale: COGS, shipping, fulfillment, payment processing (percentage plus fixed fee), and the cost of handling returns. It then calculates what fraction of each sale is left as gross profit. Break-even ROAS is the inverse of gross margin. If your margin is 50%, you need at least a 2x ROAS to cover your costs. If your margin is 30%, you need 3.33x. The lower your margin, the higher the ROAS bar. The tool also lets you set a target net margin above zero. If you want 10% profit on each ad-driven sale, the required ROAS goes higher still. A stacked bar chart shows where each dollar of your selling price goes: COGS, shipping, fulfillment, payment fees, return costs, and whatever remains as margin.

What does a typical Break-Even ROAS Calculator result look like?

Price: $100. COGS: $30. Shipping: $8. Payment processing: 2.9% + $0.30. Fulfillment: $4. Return rate: 5%. Payment fee: $3.20. Base variable cost: $45.20. After return adjustment: $47.58. Gross profit: $52.42. Gross margin: 52.42%. Break-even ROAS: 1.91x. At a 10% target margin, required ROAS rises to 2.36x.

Frequently asked questions

  • What does ROAS mean?

    ROAS stands for Return on Ad Spend. It is calculated as revenue generated divided by ad spend. A ROAS of 3x means every $1 spent on ads generates $3 in revenue. ROAS does not account for product costs. That is why this calculator exists: it translates your unit economics into the minimum ROAS that covers all costs.

  • Why does break-even ROAS matter?

    Because ROAS alone does not tell you if you are profitable. A 4x ROAS sounds strong, but if your gross margin is 20%, you need a 5x ROAS just to break even. Knowing your break-even number lets you set campaign targets that guarantee profitability instead of guessing.

  • Should I include customer acquisition cost (CAC) in this calculation?

    No. This calculator works at the gross-margin level: the cost to produce and deliver one order. CAC is a separate metric that compares your total ad spend to total new customers acquired. Use the LTV:CAC Calculator for that analysis.

  • How do refunds change the required ROAS?

    Returns add cost in two ways: you refund the revenue and you absorb the variable cost of the original order (shipping, fulfillment, payment fees). The return rate adjustment in the formula accounts for both. A 10% return rate can raise your required ROAS by 0.2-0.4x depending on your margins.

  • Why does my Shopify dashboard show different ROAS numbers?

    Shopify reports ROAS based on attributed revenue and ad spend at the campaign level. It does not subtract COGS, shipping, or payment fees per order. The number you see in Shopify is top-line ROAS. This tool converts that into the break-even ROAS that accounts for your true per-order costs.

  • What if my variable costs exceed my price?

    The tool shows \\\"Unprofitable at this price\\\" and blocks the ROAS calculation. This means you lose money on every order before ads, so no amount of ad spend can fix the economics. You need to raise prices, reduce COGS, or cut other variable costs first.

Related tools

The ROAS number that keeps you out of the red

ROAS is revenue divided by ad spend. A 3x ROAS means you got three dollars of sales for every dollar spent on ads. Sounds good. But if your costs eat most of each sale, 3x can still lose money.

Break-even ROAS is the minimum you need so ads don't cost you more than they bring in. Below it, every sale digs a deeper hole. Above it, you make money.

How it's calculated

Start with the selling price. Take away your variable costs: product cost, shipping, payment processing fees and expected refunds. What's left is the contribution per sale, the money available to pay for advertising.

Divide the price by that contribution and you have break-even ROAS. Say you sell at $50, and costs come to $30. You keep $20. Break-even ROAS is 50 divided by 20, or 2.5. Spend $1 on ads, you need $2.50 back just to cover the costs of the sale.

Fill in each cost in the calculator and it does the math, so you can test changes quickly.

Refunds raise the bar

Returns hurt twice. You refund the sale, and the ad money is already spent. If 10 percent of orders come back, your effective revenue per order drops, and the ROAS you need goes up. Put in a realistic refund rate, not a hopeful one.

What if costs exceed your price?

Then no ROAS can save you. The calculator will flag it, because you lose money on every order before a single ad is bought. Fix price, product cost or shipping first. Advertising only scales what already works.

Why your dashboard disagrees

Shopify, Meta and Google can all show different ROAS for the same period. They use different attribution windows, count view-through sales differently and may include tax or shipping in revenue. Pick one source of truth for decisions and compare against your own break-even figure.

Should you include customer acquisition cost? Break-even ROAS is already about ad spend, so ad spend is the thing you're testing. If you have other acquisition costs, like influencer fees or agency retainers, add them to the cost side for a fuller picture.

Using the result

Set your target above break-even, not at it. Break-even means zero profit. A comfortable margin pays for overhead, mistakes and growth.

Check campaigns against the number weekly. Pause what sits below it for a stretch, and give what sits well above it more budget.

Recalculate whenever supplier prices, shipping rates or fees change. A small cost increase can move your break-even more than you'd guess.