Calculator
Break-even ROAS calculator
Break-even ROAS is the return on ad spend at which an order neither makes nor loses money. Every target ROAS in Google Ads or Meta should sit above it, and how far above depends on the margin you want to keep. Enter your own numbers; nothing is stored.
How break-even ROAS is calculated
Break-even ROAS is the selling price divided by the contribution an order leaves after product cost, fulfilment, payment fees and the expected cost of returns. If an order sells for 80 dollars and leaves 40 dollars of contribution, the store can spend up to 40 dollars of advertising on it, which is a ROAS of 2.0. Spend more and the order loses money even though the ad platform reports a positive return.
The target-margin figure takes the same contribution and reserves a share of the price as profit first, then works out the ROAS that leaves that share intact. It is the number a target ROAS bid strategy should actually be set to.
What to put in each field
Use the average order value of ad-driven orders, not the whole store, if you can separate them; they are often smaller. Product cost should be the landed cost of the goods in a typical order. Fulfilment covers pick, pack, packaging and the shipping you pay, net of what the customer pays. Payment and platform fees are the percentage taken by the payment processor and, on some platforms, a transaction fee. The return rate is the share of orders refunded; the calculator assumes the goods come back resaleable, so raise the rate if they do not.
Why platform ROAS and break-even ROAS disagree
Ad platforms report ROAS on revenue they attribute to themselves, which includes orders that would have happened anyway and orders other channels also claim. Break-even ROAS is a property of your margin, not of any platform's reporting. Read the two together: if a campaign reports a ROAS close to break-even under the platform's generous attribution, the true figure is below it and the campaign is losing money.
Questions about this tool
Should the target ROAS in Google Ads be set to the break-even figure?
No. Break-even is the floor. Set the target to the figure that preserves the margin you want on ad-driven orders, which this calculator shows as the second result, and remember that the platform's attributed ROAS overstates the true return, so the target usually needs to sit higher still.
Does break-even ROAS change for new versus returning customers?
The formula is the same, but the acceptable figure differs. A store may accept a lower first-order return for new customers who go on to buy again, which is a lifetime value decision. Use the CAC payback calculator to see how long that recovery takes before lowering the target.
Why is my break-even ROAS so high?
Because contribution per order is thin. Low price, high product cost, expensive shipping or a high return rate all push it up. The fix is usually in the order itself, such as raising average order value with bundles, reducing returns from the product page or renegotiating fulfilment, rather than in the campaigns.
By CartKernel · Last reviewed
Where this arithmetic gets applied
More tools and answers
Run it on your real numbers.
A free Growth Analysis applies all of this to your store and ranks what to fix first, by revenue at stake.