How do I calculate break-even ROAS?

Divide your average order value by your margin per order: break-even ROAS = AOV ÷ (AOV − COGS − fees). Example: an $80 order with $30 of COGS and $10 of fees leaves a $40 margin, so 80 ÷ 40 = 2.0. Below a 2.0 ROAS, every order loses money.

What is a good break-even ROAS?

There isn't a universal one. Break-even ROAS is your margin math. It falls out of your own AOV, COGS, and fees, so two stores running identical ads can have completely different break-even points. A lower break-even ROAS means stronger margins and more room for ads to work.

Break-even ROAS vs target CPA: which should I use?

They are two views of the same margin. Break-even CPA is your margin per order in dollars: the most you can pay for an order without losing money. Break-even ROAS is the same boundary expressed as a revenue multiple. Use CPA when you optimize for leads or orders at a price; use ROAS when you optimize for purchase revenue.

Kelpi

Break-Even ROAS Calculator

Find the ROAS where an order stops losing money. Enter average order value, costs, and fees to get your break-even ROAS and CPA. Free, no signup.

Read the longer argument: paid ads as a self-funding loop.

Average order value (AOV)

Cost of goods per order (COGS)

Fees per order

Shipping, payment processing, packaging.

Break-even ROAS

Break-even CPA

Enter your AOV, COGS, and fees to see the ROAS where an order stops losing money.

Planning inputs

More inputs for break-even planning.

AOV and CAC sit around your break-even floor: one shapes the revenue side of the equation, and the other keeps acquisition cost tied to total marketing spend.

AOV calculator

Calculate average order value from revenue and order count.

Revenue

Orders

Average order value

AOV = revenue / orders

Use AOV as an input to contribution margin, break-even ROAS, allowable CPA, and offer testing.

CAC calculator

Calculate customer acquisition cost from ad spend, other marketing spend, and new customers.

Ad spend

Other marketing spend

New customers

Customer acquisition cost

CAC = (ad spend + other marketing spend) / new customers

Compare CAC with gross margin, payback period, retention, and customer value before you decide how much budget it can support.

The definition

What break-even ROAS is.

Break-even ROAS is the return on ad spend at which an order makes exactly zero profit: the revenue covers the product, the fees, and the ad cost, with nothing left over. Above it, orders make money; below it, every sale your ads drive loses money. The formula:

break-even ROAS = AOV ÷ (AOV − COGS − fees)

AOV is your average order value, COGS is what the goods in an order cost you, and fees cover shipping, payment processing, and packaging. The denominator (AOV minus COGS minus fees) is your margin per order, and it does all the work.

Worked example

From order value to break-even.

Say your AOV is $80, COGS per order is $30, and fees are $10. Margin per order: 80 − 30 − 10 = $40. Break-even ROAS: 80 ÷ 40 = 2.0. Your ads must return at least $2 of revenue per $1 of spend before an order makes a cent.

The same margin gives your break-even CPA of $40, the most you can pay to acquire an order and not lose money on it. One margin, two boundaries.

Why it matters

Why break-even beats gross ROAS.

A “good” ROAS is meaningless without margins. A 3.0 ROAS is a win for a store whose break-even is 1.6 and a slow leak for one whose break-even is 3.5. Same ad performance, opposite outcomes. Break-even ROAS is the number your account should actually be compared against, because it is derived from your economics instead of someone else’s average. It is also the first number worth knowing before paying anyone to run your ads. A retainer raises your effective break-even, and the cited breakdown of what a Facebook ads agency costs shows by how much. I have been the client paying for ads and outside help. A retainer becomes part of the math, and if the tests are aimed at clicks instead of buyers, the cost teaches you almost nothing.

Benchmarks

What’s a good ROAS?

Once you know your break-even, benchmarks finally mean something. The benchmark guide breaks down what counts as a good Facebook ROAS by margin profile, and the plain ROAS calculator handles the forward math, including reverse mode for planning spend.

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FAQ

How do I calculate break-even ROAS?: Divide your average order value by your margin per order: break-even ROAS = AOV ÷ (AOV − COGS − fees). Example: an $80 order with $30 of COGS and $10 of fees leaves a $40 margin, so 80 ÷ 40 = 2.0. Below a 2.0 ROAS, every order loses money.
What is a good break-even ROAS?: There isn't a universal one. Break-even ROAS is your margin math. It falls out of your own AOV, COGS, and fees, so two stores running identical ads can have completely different break-even points. A lower break-even ROAS means stronger margins and more room for ads to work.
Break-even ROAS vs target CPA: which should I use?: They are two views of the same margin. Break-even CPA is your margin per order in dollars: the most you can pay for an order without losing money. Break-even ROAS is the same boundary expressed as a revenue multiple. Use CPA when you optimize for leads or orders at a price; use ROAS when you optimize for purchase revenue.

Forward math and spend planning: ROAS calculator

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