Break-Even ROAS Calculator: Find Your True eCommerce Profit

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Break-Even ROAS Calculator

Enter your real per-order numbers in one currency. The calculator shows the ROAS you need to break even, the ROAS you need for your profit target and what the ROAS reported by Google or Meta is really worth.

Try the default numbers first. A 3x ROAS in the dashboard looks healthy, but once costs and inflated attribution are counted, the store barely clears a profit. That gap is the reason this calculator exists.

Why a Good ROAS Can Still Lose Money

ROAS only compares revenue with ad spend. It ignores everything else an order costs you. Two stores can both report 3x ROAS while one makes healthy profit and the other loses money on every sale.

Same ROAS, opposite outcomes. Store B is spending 33 in ads to win an order that only leaves 22 behind. Scaling that campaign would scale the loss.

How to Calculate Break-Even ROAS

Three steps, using your own numbers per order:

1. Contribution per order = order value minus product cost, shipping and fulfilment, payment fees and returns.
2. Contribution margin = contribution per order divided by order value.
3. Break-even ROAS = 1 divided by contribution margin.

Use this table to read your break-even ROAS straight from your contribution margin:

To set a profit target, subtract it from your margin first: target ROAS = 1 divided by (contribution margin minus target net margin). Low-margin stores feel this hardest. At a 25% margin, a 15% profit target needs a 10x ROAS, which is why margin, not ad skill alone, often decides how far a store can scale on paid media.

The Costs Most Stores Leave Out

Most break-even numbers are wrong because the cost side is incomplete. Check each of these against your last 90 days of orders:

1. Payment and platform fees. Gateway fees, marketplace commission and per-order app charges.
2. Shipping you absorb. Any shipping cost the customer does not pay, plus packaging and pick-and-pack.
3. Returns and exchanges. Refunded revenue, return shipping and stock that cannot be resold.
4. Discounts and promo codes. Use the average order value after discounts, not the list price.
5. Chargebacks and failed deliveries. Small per order, large at scale, especially with cash on delivery.

Why Platform ROAS Is Usually Inflated

Even with costs counted correctly, the ROAS shown in Google Ads and Meta Ads Manager tends to overstate what ads actually drive:

1. Double counting. A customer clicks a Meta ad, later searches on Google and buys. Both platforms claim the sale.
2. View-through and modelled conversions. Sales from people who only saw an ad, or that were estimated rather than tracked, get included.
3. Brand and returning customers. Campaigns pick up people who were already going to buy, then report them as ad-driven revenue.
4. Discount-driven sales. Promotions lift ROAS while cutting the margin that ROAS ignores.

That is why the calculator asks how much of reported revenue is real. To estimate it, compare total store revenue with total platform-reported revenue over the same period, and track blended ROAS, also called MER: total revenue divided by total ad spend. The most reliable answer comes from a holdout test, where ads pause in one region and results are compared with similar regions. If your reported numbers are already falling, see why ROAS drops on Google and Meta Ads.

Which ROAS Target Should You Set?

Break-even is the floor, not the goal. Use the ROAS for your target margin when setting target ROAS bidding in Google Ads or a ROAS goal in Meta. Then adjust by customer value: if new customers reliably reorder, you can accept a lower first-order ROAS on prospecting while holding retargeting and brand campaigns to a higher bar.

Margin also decides your campaign mix. High-margin products can carry broad prospecting, while low-margin products usually need tighter, high-intent campaigns. Our guide to the best Google Ads and Meta Ads campaigns for eCommerce shows how to split budget once your targets are set.

Frequently Asked Questions

What is a good ROAS for eCommerce?

There is no universal number. A good ROAS is one comfortably above your own break-even ROAS. A store with 60% margins can grow profitably at 2.5x, while a store with 25% margins loses money at 3.5x.

Is break-even ROAS the same as target ROAS?

No. Break-even ROAS is where profit after ads is zero. Target ROAS adds the net margin you want on top, so it is always higher than break-even.

Should fixed costs like salaries or agency fees go into break-even ROAS?

Keep per-order costs in the break-even calculation and cover fixed costs from monthly profit after ads. If that monthly profit does not cover them, raise your target net margin.

What is MER in eCommerce?

Marketing efficiency ratio is total revenue divided by total ad spend across every channel. It ignores platform attribution, which makes it a useful check against inflated ROAS.