Break-Even ROAS Calculator
Calculate the ROAS at which ad spend exactly offsets your gross margin — a profitability threshold, not a performance score.
Gross margin as a percentage of revenue — e.g. if a $100 sale costs $60 in cost of goods sold, your margin is 40%.
At this ROAS, ad spend exactly consumes the margin it generated — zero profit, zero loss, from ad spend alone. A ROAS above this threshold is contributing profit from a margin standpoint; below it, ad spend is costing you more than the margin it returns. This assumes "margin" means gross margin (revenue minus cost of goods sold) as used above — if you define margin differently (e.g. after other variable costs), your real break-even point will differ. This is a threshold, not a guarantee of overall profitability, which also depends on costs this simple model doesn't include (overhead, returns, other operating expenses).
Calculated entirely in your browser — nothing you enter here is sent to a server.
Break-even ROAS is the return on ad spend at which your margin exactly offsets what you spent — Break-even ROAS = 100 ÷ Gross Margin %. A 40% margin means you need at least a 2.5x ROAS just to avoid losing money on ad spend from a margin standpoint.
This assumes "margin" means gross margin (revenue minus cost of goods sold) — a different margin definition changes what break-even actually means. This is a threshold, not a guarantee of overall profitability, which also depends on costs this simple model doesn't include.
How to use the Break-Even ROAS Calculator
- Work out your gross margin: revenue minus cost of goods sold, divided by revenue, times 100.
- Enter that number in Gross margin (%), for example 35 for 35%.
- Click Calculate to see your break-even ROAS as a multiple.
- Compare it with the ROAS your campaigns actually achieve; click Reset to try another margin.
Example: A product with a 35% gross margin
A product sells for $80 and costs $52 to make and ship, so the gross margin is 35%. Enter 35 in Gross margin (%) and click Calculate. The result is 2.86x (100 ÷ 35 = 2.857..., rounded to two decimals), so a campaign must return at least $2.86 in revenue per $1 of ad spend to cover its own ad cost.
Questions about the Break-Even ROAS Calculator
- Should I enter 35 or 0.35?
- Enter the percentage, such as 35. Typing 0.35 is read as 0.35% and returns 285.71x, a far higher threshold than you intended.
- What margin values are accepted?
- Any number greater than 0 and up to 100, decimals included. Zero, negative values and anything above 100 return "Margin must be greater than 0% and no more than 100%." A 100% margin gives 1x.
- How do I use the result with my actual ROAS?
- Calculate your campaign's ROAS (revenue divided by ad spend) and compare. If your 35% margin product runs at 4x, it is above the 2.86x threshold; at 2x, the ad spend costs more than the margin it brings in.
- Can I include shipping or payment fees?
- Yes, if you subtract them from revenue along with cost of goods sold before working out the margin percentage. A lower margin raises the break-even ROAS.