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Break-Even ROAS Calculator

Break-even ROAS is the ROAS where your ads pay for themselves and nothing more. The formula is price divided by profit per sale before ads. Sell at $50 and keep $20 after product, shipping and fees, and your break-even ROAS is 2.5x. Below that line, every sale loses money.

Your numbers

What the customer pays, before tax.

What the supplier charges you.

Packaging, app fees, returns.

Card processor percent, often near 3%.

As a percent of the price. Gives you the ROAS to aim for.

Break-even ROAS
2.50x

Good: At this price you need 2.50x ROAS just to break even.

Break-even ROAS: 2.50x. At this price you need 2.50x ROAS just to break even.

Break-even CPA (your profit per sale before ads)
$20.00
Margin
40%
Payment fees per sale
$2.00
Where each sale goes
  • Product$22.00
  • Shipping$6.00
  • Payment fees$2.00
  • Other costs$0.00
  • Left for ads and profit$20.00

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The Break-Even ROAS Formula

Profit per sale
price - product cost - shipping - payment fees - other costs
Break-even ROAS
price / profit per sale
Break-even CPA
profit per sale
Margin
profit per sale / price x 100

Every sale leaves you some money before ads. That money is the most the ads can cost per sale, and you still break even. That is your break-even CPA (cost per acquisition).

Break-even ROAS is the same idea, said as a ratio. Divide the price by that profit. It is also 1 divided by your margin, so a 40% margin means 2.5x and a 25% margin means 4x.

Payment fees count. Shopify Payments, Stripe and PayPal all take a percent of the order plus a small fixed fee. Leave them out and your break-even ROAS comes out too low, so you scale ads that lose money.

Three Worked Examples

  1. A Dropshipped Posture Corrector

    You sell it for $39.99. The supplier charges $9.50 and shipping is $4.50. Card fees are 2.9% plus $0.30.

    • Fees: $1.46
    • Profit per sale: $24.53
    • Break-even ROAS: $39.99 / $24.53 = 1.63x
    • Break-even CPA: $24.53

    Fat margin (61.3%). Anything above 1.63x makes money. This is the kind of product you can test hard.

  2. A Sunset Lamp with a Profit Goal

    Price $64, product $22, shipping $8, $3 for packaging and app fees, same card fees. You want to keep 10% of every sale as profit.

    • Profit per sale before ads: $28.84
    • Break-even ROAS: 2.22x
    • Keep 10% ($6.40), so ads can cost $22.44 per sale
    • ROAS for 10% profit: 2.85x

    Break-even is 2.22x, but the real target is 2.85x. That gap is why "we hit break-even" is not a win.

  3. A Cheap Phone Case

    Price $24.99, product $7.80, shipping $5.20, $1.50 other costs, same card fees.

    • Profit per sale: $9.47
    • Margin: 37.9%
    • Break-even ROAS: 2.64x
    • Break-even CPA: $9.47

    Low price, thin margin. You need 2.64x just to stand still, and only $9.47 can go to ads per sale. Raise the price or sell a bundle before you raise the budget.

What Is a Good Break-Even ROAS

Lower is better. A low break-even ROAS means a fat margin, so the ads have more room to work. A high one means every click has to be close to perfect.

There is no single good number for every store, and anyone who gives you one is guessing. It comes straight from your own price and costs. What we can say for sure: 1 divided by your margin is the floor. A 50% margin gives 2x. A 20% margin gives 5x. The full margin table is in what is a good ROAS.

If your break-even ROAS is very high, the fix is usually not in Google Ads. It is the price, the product cost, a bundle, or a better shipping deal.

Break-Even ROAS vs Target ROAS

Break-even ROAS is where you make zero. Target ROAS is what you set in Google Ads to make a profit. Your target should sit above break-even, with room for the profit you want to keep.

Google's Target ROAS bid strategy takes a percent. 250% in Google means 2.5x here. Use the profit box in the calculator to get the number for your goal.

Common Mistakes

  • Leaving out payment fees

    About 3% of every order goes to the card processor. On a thin margin that moves your break-even ROAS a lot.

  • Using one number for the whole store

    A $24.99 phone case and a $64 lamp do not share a break-even. Work it out per product, or at least per price band.

  • Calling break-even a goal

    At break-even you worked a month for nothing. Set your target above it.

  • Forgetting returns and refunds

    If 5% of orders come back, put that cost in other costs. It is real money.

  • Trusting Google's ROAS when tracking is off

    If Google counts some sales twice, its ROAS looks better than it is. Check it against your store's own sales.

Read next

Sources: Google Ads Help: About Target ROAS bidding.

Questions People Ask

Take your selling price and subtract the product cost, shipping, payment fees and any other cost per order. That is your profit per sale before ads. Divide the price by that profit. A $50 product with $20 profit has a break-even ROAS of 2.5x.

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