Break-even ROAS calculator for ecommerce ads
This Break Even ROAS Calculator helps ecommerce sellers and marketers understand how much return on ad spend is needed before a campaign loses money. It is useful for Google Ads, Meta Ads, TikTok Ads, Amazon Ads, influencer campaigns, and paid traffic tests where product margin determines how aggressively you can scale.
How to use
Enter average order value, product cost, shipping cost, payment and platform fees, other variable costs, current ad spend per order, and target profit margin. The calculator estimates contribution margin, allowable ad spend, break-even ROAS, target ROAS, and profit after ads.
Formula
Contribution margin = average order value - product cost - shipping cost - platform fees - other variable cost. Allowable ad spend = contribution margin. Break-even ROAS = average order value / allowable ad spend. Target ROAS uses the same formula after reserving target profit.
Example
If average order value is $80 and non-ad variable costs are $42, the order has $38 available before ad spend. Break-even ROAS is $80 divided by $38, or about 2.11x. A target profit margin pushes required ROAS higher.
Common mistakes
Common mistakes include using revenue-only ROAS targets, ignoring shipping and payment fees, scaling ads before checking contribution margin, and comparing campaigns with different average order values.