Your break-even ROAS is your price divided by what you keep from each order before ads. Below that number, every ad sale loses money. This break-even ROAS calculator also counts payment fees, refunds and the profit you want to keep, and tells you whether the ROAS you are getting now actually makes money.
Break-even ROAS calculator
Per-order numbers, in your store currency. Example values are filled in.
Nothing you type is stored or sent anywhere. The calculator runs in your browser.
How to use the calculator
Enter one typical order. Put the price the customer pays you before sales tax, then what that order costs you: the product, shipping and packing, and fees. If you sell through Shopify Payments on the Basic plan in the US, online card fees are 2.9% + 30¢ (Shopify pricing), which is what the example uses. Check your own plan and payment provider, because rates differ.
Add your refund rate and the profit you want to keep after ads. If you know the ROAS your ads are getting now, add it and the tool tells you whether you are making or losing money on each ad-driven sale.
How the break-even ROAS formula works
ROAS is revenue divided by ad spend. Google describes target ROAS as the conversion value you want for each dollar spent, so $5 of sales from $1 of ads is 500% (Google Ads Help). The calculator shows both forms: 2.5x is the same as 250%.
It works in three steps.
1. Kept per order (before ads)
= price x (1 - refund rate)
- product cost - shipping - fixed fee
- price x payment fee % - price x other % costs
2. Break-even ROAS = price / kept per order
Break-even CPA = kept per order
3. Target ROAS = price / (kept per order - price x profit goal %)
Profit per ad-driven order at your ROAS
= kept per order - price / your ROASTwo assumptions to know about. Refunds are treated as lost revenue while the costs stay, which fits products you cannot resell. If you restock most returns, enter only the share you cannot resell. And the tool looks at one order. It does not count repeat purchases, so for a product people reorder, a ROAS a little under break-even on the first order can still pay back later. That is a call for your own numbers.
Worked example: ROAS calculator with real numbers
This example uses the values filled in above. Your store's figures will differ.
Price: $60.00
Revenue after refunds: $60 x (1 - 0.05) = $57.00
Product cost: - $18.00
Shipping and packing: - $7.00
Payment fee: - $60 x 2.9% = $1.74
Fixed fee: - $0.30
Kept per order: $57.00 - 18.00 - 7.00 - 1.74 - 0.30 = $29.96
Break-even ROAS: $60 / $29.96 = 2.00x (200%)
Break-even CPA: $29.96
Target for 10% profit: keep $6.00 of each $60 sale
$29.96 - $6.00 = $23.96 for ads
$60 / $23.96 = 2.50x (250%)
At a current ROAS of 2.5x:
ad cost per order $60 / 2.5 = $24.00
profit per order $29.96 - $24.00 = $5.96
per $1,000 of ads 1,000 / 24 = 41.7 orders x $5.96 = about $248Notice what the refund rate does. Set it to 0% and the kept amount rises to $32.96, which drops break-even ROAS to 1.82x. A few points of refunds can decide whether a campaign makes money.
What a good ROAS looks like, and what to do next
There is no universal good ROAS. A good ROAS is one above your own break-even number, with room for the profit you want. A 2x ROAS is great for a store that keeps 70% of each sale and a loss for one that keeps 30%.
- Current ROAS above your target ROAS: the ads pay. Test a higher budget in steps and watch whether ROAS holds.
- Between break-even and target: you make a little. Work on the page and the offer before spending more. A better conversion rate lifts ROAS without touching the ads.
- Below break-even: each sale from ads loses money. Cut spend on the worst campaigns, then fix margin (price, bundles, shipping cost) or conversion before scaling.
For other numbers behind your marketing, try our social media ROI calculator and our SEO meta tag checker, which helps you win traffic you don't pay for per click. To see what a page-by-page sales review looks like, read this example website sales fix report.
ROAS stuck under break-even?
Often the ads are fine and the product page loses the sale. Website Sales Fix reads your store like a first-time customer and gives you the exact words to change.
Questions people ask
How do you calculate break-even ROAS?
Divide your selling price by the amount you keep from each order before ad costs. That amount is the price minus product cost, shipping, payment fees and any other per-order costs, adjusted for refunds. For example, a $60 product that leaves you $29.96 has a break-even ROAS of 60 divided by 29.96, which is 2.00x or 200%.
What is a good ROAS for ecommerce?
A good ROAS is any ROAS above your own break-even number, with enough room for the profit you want. It depends on your margin, so benchmarks from other stores do not tell you much. A store that keeps 70% of each sale can profit at a much lower ROAS than one that keeps 30%. Work out your break-even figure first.
What is the difference between ROAS and break-even ROAS?
ROAS is what your ads actually return: revenue divided by ad spend. Break-even ROAS is the lowest ROAS at which your ads stop losing money, based on your costs. Compare the two. If your ROAS is above break-even, ad sales make a profit. If it is below, each ad-driven sale loses money, even if the ad platform shows lots of revenue.
Should break-even ROAS include shipping and fees?
Yes. Every cost that grows with each order belongs in the calculation: product cost, shipping, packaging, payment processing, marketplace or app fees and refunds. Leaving them out makes your break-even ROAS look lower than it is, so you may think campaigns are profitable when they are not. Fixed costs like rent and salaries are usually left out.
What is break-even CPA?
Break-even CPA is the most you can pay in ad costs to win one sale without losing money. It equals the amount you keep from each order before ads. In the example above that is $29.96. If your cost per purchase in the ad platform is higher than this, those sales lose money on the first order.
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