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 margin | Required ROAS |
|---|---|
| 0% | 1.83× |
| 5% | 2.01× |
| 10% | 2.24× |
| 15% | 2.52× |
| 20% | 2.89× |
How this tool works
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.
Worked example
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.