Break-even ROAS calculator

1. From price and costs is the more accurate way. Enter the selling price (or your average order value if orders often hold more than one item), the product cost, and the other costs you pay on every order: shipping and fulfilment, payment and platform fees, and anything else such as packaging or the average cost of returns. Leave a cost empty if it does not apply.
2. From profit margin is the quick way, if you already know the share of revenue you keep after every cost except ads.
3. Add the profit you want to keep (optional). Enter it as a percentage of revenue and the calculator adds the target ROAS, and in the first mode the target CPA, that leaves that profit after ad spend.

Alongside break-even ROAS you get your margin before ads, the break-even CPA (the most you can pay in ads for one order) and break-even ACoS.

Break-even ROAS = selling price ÷ profit per order before ad spend = 1 ÷ profit margin

Example. A brand sells a dress for $80. Each order costs:

• $24 for the dress itself
• $7 for shipping and fulfilment
• 3% in payment fees, which is $2.40
• $2 for packaging

Profit per order before ads = $80 - $24 - $7 - $2.40 - $2 = $44.60, a 55.75% margin.

Break-even ROAS = $80 ÷ $44.60 = 1.79x. The ads have to bring in $1.79 of sales for every $1 spent before the brand stops losing money on them. The break-even CPA is $44.60: pay more than that in ads for one order and the order loses money.

From break-even to a target ROAS

Breaking even is not the goal, so work out the ROAS that leaves the profit you want:

Target ROAS = 1 ÷ (profit margin before ads - profit margin you want to keep)

To keep 15% of revenue as profit in the example: 1 ÷ (0.5575 - 0.15) = 2.45x. If the profit you want is as large as the margin itself, no ROAS can reach it.

Break-even ACoS

ACoS (ad spend ÷ ad revenue) is the inverse of ROAS, so break-even ACoS equals your margin. In the example, an ACoS above 55.75% loses money.

Break-even ROAS is only as good as the costs you put in. The common mistake is to use gross margin (price minus product cost) and forget everything else each order costs. That makes the break-even look lower than it is, so campaigns that seem profitable quietly lose money.

Returns. Spread them across all orders. If 10% of orders come back and each return costs you $30 in lost product and postage, add $3 per order.

Several products. Use your average order value and the average cost per order. If your products have very different margins, work out break-even ROAS for each product line you advertise separately.

Repeat customers. Break-even ROAS here is for the first order. If customers reliably come back, you may choose to accept a first-order ROAS below break-even to win them, as long as your cash flow can carry it.

A lower break-even ROAS gives your ads more room to work. Every lever is a margin lever:

• Raise the order value. Bundles and a free-shipping threshold spread shipping and fixed per-order costs over more revenue.
• Cut product cost. Better supplier terms or larger runs lower cost per unit. See the markup calculator to check your pricing.
• Reduce returns. Clear size guides and accurate product photos from several angles set the right expectations before the order.
• Review fees. Payment and platform fees are a percentage of every order, so a small cut applies to all of them.
• Raise prices where you can. A price rise flows straight into margin, and a small one can lower break-even ROAS a lot when margins are thin.

When you plan a campaign in Ad Autopilot, you enter your average order value and gross margin. The unit economics are calculated in code, not by the AI model, so the numbers cannot be made up:

• Break-even ROAS = 1 ÷ margin. If you also give fulfilment cost, payment fees, discounting and return rate, it prices everything on contribution margin: (gross margin minus fulfilment, fees and discounting) × (1 - return rate). Otherwise the plan says the targets are based on gross margin and may be optimistic.
• Target ROAS = break-even × 1.3 by default, to leave room for day-to-day swings. You can edit it.
• Target CPA = average order value ÷ target ROAS. This is the most the campaign should pay for a purchase.
• A budget check. On Meta, an ad set usually leaves the learning phase after about 50 results in the week after its last significant edit, so the plan compares your daily budget with 50 ÷ 7 × target CPA and tells you when the budget is too small to get there.