Break-Even ROAS Calculator

Find the minimum ROAS that covers your product and variable costs, based on your contribution margin — plus a target ROAS that builds in a desired profit margin.

Written and reviewed by the CalcBundle editorial team. Transparent formulas · results are estimates, not advice.

Break-even ROAS

Enter a selling price greater than zero (or use the variable-cost % method).

What is a break-even ROAS calculator?

Break-even ROAS is the return on ad spend at which your advertising exactly pays for the cost of the goods and variable fees on the sales it drives. It is the single most useful number for setting advertising targets, because it tells you the floor below which ads lose money.

How is it calculated?

Contribution margin % = 1 − variable costs ÷ selling price
Break-even ROAS = 1 ÷ contribution margin %
Target ROAS = 1 ÷ (contribution margin % − desired profit margin %)

You can enter itemised costs (product, shipping, payment and marketplace fees) or a single total variable-cost percentage.

Why margins drive break-even ROAS

A product with a 50% contribution margin breaks even at a 2.0x ROAS; one with a 25% margin needs 4.0x. That is why two sellers running the same ads can have completely different targets. Work out your margin first with the contribution margin calculator.

Break-even ROAS vs target ROAS

Break-even ROAS leaves zero profit. If you want, say, a 20% profit margin after advertising, your target ROAS is higher. The calculator computes both when you enter a desired margin.

Example

A $100 product with $60 of variable costs has a 40% contribution margin, so its break-even ROAS is 2.5x. To also earn a 20% margin, the target ROAS rises to 5.0x.

Important caveat

Break-even ROAS means ad revenue covers variable costs — it does not guarantee the whole business is profitable, because fixed overhead (rent, salaries, software) still has to be paid. Compare your actual ROAS to this break-even figure.

Frequently asked questions

What is break-even ROAS?

Break-even ROAS is the minimum return on ad spend at which advertising revenue exactly covers your product and variable costs. Above it you contribute to fixed costs and profit; below it, ads lose money.

How is break-even ROAS calculated?

Break-even ROAS = 1 ÷ contribution margin %. If your contribution margin is 40%, your break-even ROAS is 1 ÷ 0.40 = 2.5x.

Why do margins affect break-even ROAS?

The thinner your margin, the more revenue each ad dollar must produce to cover costs, so break-even ROAS rises. High-margin products can be profitable at a much lower ROAS.

What is the difference between break-even ROAS and target ROAS?

Break-even ROAS covers costs with zero profit. Target ROAS builds in a desired profit margin, so it is higher than break-even ROAS.

ROAS

Calculate return on ad spend and estimate profit after advertising.

Contribution Margin

Work out contribution margin per unit, % and break-even units.

Product Pricing

Find a profitable selling price from costs, fees, ads and target margin.

E-commerce Profit

Calculate net profit, margin, break-even price and maximum ad spend for a product.

Disclaimer. This calculator provides estimates for informational purposes only. Results are based on the information you enter and the assumptions used by the calculator. Actual financial, tax, business valuation, lending, marketplace or investment outcomes may differ. Consider consulting a qualified professional for decisions involving significant amounts of money. Results are estimates based on the costs entered. Break-even ROAS covers variable costs but not necessarily fixed overhead.