What break-even ROAS means
ROAS (return on ad spend) is revenue divided by ad spend. Your break-even ROAS is the point where the revenue from an ad exactly pays for the product it sold and the ad itself. Spend more efficiently than that (higher ROAS) and you profit; less efficiently (lower ROAS) and every sale costs you money.
It's driven entirely by margin. The thinner your margin, the more revenue each ad dollar has to return before you're in the black.
The formula
contribution margin = price − (COGS + shipping + fees + fulfillment)
gross margin = contribution margin ÷ price
// the answers
break-even ROAS = price ÷ contribution margin = 1 ÷ gross margin
break-even ACOS = gross margin (as a %)
target ROAS = price ÷ (contribution margin − target% × price)
ACOS (advertising cost of sale) is just the inverse view — ad spend ÷ revenue, as a percentage. Break-even ACOS equals your gross margin: if 40% of the price is margin, you can spend up to 40% of revenue on ads before breaking even.
Worked examples
Healthy margin (50%)
| Selling price | $100.00 |
| All per-order costs | $50.00 |
| Contribution margin | $50.00 |
| Break-even ROAS (100 ÷ 50) | 2.00× |
Thin margin (20%)
| Selling price | $40.00 |
| All per-order costs | $32.00 |
| Contribution margin | $8.00 |
| Break-even ROAS (40 ÷ 8) | 5.00× |
Break-even vs. a 15% target margin
| Selling price | $100.00 |
| Contribution margin (50%) | $50.00 |
| Allowable ad spend at 15% target | $35.00 |
| Target ROAS (100 ÷ 35) | 2.86× |
Frequently asked questions
What is break-even ROAS?
Break-even ROAS is the return on ad spend at which your ad-driven revenue exactly covers your product and ad costs — no profit, no loss. It equals 1 divided by your gross margin fraction. At a 50% margin, break-even ROAS is 2.0×.
How do you calculate break-even ROAS?
Subtract all per-order costs (COGS, shipping, transaction fees, fulfillment) from your selling price to get your contribution margin. Divide the price by that margin: Break-even ROAS = price ÷ contribution margin. The same margin as a percentage of price is your break-even ACOS.
What is the difference between ROAS and ACOS?
They are two views of the same number. ROAS is revenue ÷ ad spend (a multiplier, like 4×). ACOS is ad spend ÷ revenue (a percentage, like 25%). ACOS = 1 ÷ ROAS. Amazon sellers usually track ACOS; Google and Meta advertisers usually track ROAS.
What is a good ROAS for e-commerce?
There is no universal number — a "good" ROAS is any figure above your break-even ROAS. A store with thin 20% margins needs 5× just to break even, while a 60% margin store breaks even at about 1.7×. Always compare your target ROAS to your own break-even, not an industry average.
Does break-even ROAS include returns and overhead?
This calculator covers per-order variable costs only. Returns, chargebacks, fixed overhead, and taxes sit below contribution margin, so your true break-even ROAS should be a little higher than the figure shown. Treat the result as a floor and add a safety buffer.
Calculators tuned to your platform
The generic calculator above works everywhere — but each platform taxes your margin differently. These variants carry the real fee structures:
- Amazon Break-even ACOS Calculator — The exact ACOS ceiling for your Sponsored Products campaigns — after referral and FBA fees, not before.
- Shopify Break-even ROAS Calculator — The ROAS your Meta and Google campaigns must clear once processing, shipping and fulfillment are paid.
- TikTok Shop Break-even ROAS Calculator — Commission plus affiliate cuts eat margin fast at TikTok price points — know your floor before you scale spend.
- Dropshipping Break-even ROAS Calculator — Ads are your biggest cost — which makes your break-even ROAS the single number your store lives or dies on.
- Etsy Break-even ROAS Calculator — Etsy stacks three separate fees on every sale — your ad break-even starts after all of them.
- Google Ads ROAS Calculator — The ROAS your Google Shopping and Search campaigns have to clear before Target ROAS bidding starts spending at a loss.
- Facebook Ads ROAS Calculator — The ROAS your Meta campaigns must clear once product, shipping and fees are paid — the floor your ROAS goal should never dip below.
- See all calculators →