Worked example

Order revenue$100
Non-ad costs$70
Max break-even ad cost$30
Break-even ROAS3.33×
Break-even ROAS = revenue ÷ contribution before advertising

Start with contribution before advertising

Subtract product cost, platform fees, payment fees, fulfillment, shipping and a returns reserve from order revenue. What remains is the maximum ad spend at zero profit.

If $30 remains from a $100 order, break-even ACOS is 30% and break-even ROAS is 100 ÷ 30, or 3.33×.

Target ROAS must preserve profit

If the business needs $15 profit on the same order, only $15 is available for ads. The corresponding target ROAS is 100 ÷ 15, or 6.67×.

A campaign below target may still serve customer acquisition or lifetime-value goals, but that decision should be explicit.

  • Include discounts in actual revenue
  • Reserve for returns using channel data
  • Compare new and returning customers separately

Use realized, not dashboard-only, economics

Ad platforms may report attributed revenue before refunds and without marketplace or fulfillment costs. That is not net profit.

Reconcile campaign data with settled orders regularly, and update the calculator when fees, average order value or return rates change.

Use your numbers

Turn the example into your estimate.

The calculator keeps every assumption visible and updates the result as you type.

Calculate Break-even ROAS ↗