How do you use the break-even ROAS calculator?
Enter your price per order and your variable costs per order. The calculator shows contribution margin, break-even ROAS and break-even CPA; add purchases and impressions to see break-even CPM too.
- Price per order. Use your average order value after discounts.
- Variable costs per order. Add up product cost, shipping you pay, payment fees, packaging and any other cost that comes with each order.
- Optional: purchases and impressions from the same ads, for break-even CPM.
- Copy the page link to share the result. Only the numbers are stored in it.
What is the break-even ROAS formula?
Break-even ROAS is 1 divided by your margin as a decimal. The Amazon Ads "Ads Math" guide gives it as 1 ÷ gross profit margin; this calculator uses contribution margin, which also takes off shipping, fees and other per-order costs.
Contribution margin = price − variable costs per order
Margin ratio = contribution margin ÷ price
Break-even ROAS = 1 ÷ margin ratio
Break-even CPA = contribution margin
Break-even CPM = break-even CPA × (purchases ÷ impressions) × 1,000
The Corporate Finance Institute defines the contribution margin ratio as revenue minus cost of goods sold and other variable expenses, divided by revenue. That is the margin ratio above, worked out per order.
If variable costs are equal to or higher than the price, there is no margin and no ROAS can break even. The calculator shows a dash in that case.
Worked example
Enter these numbers in the calculator above (example numbers, in any currency):
| Input | Value |
|---|---|
| Price per order | 150 |
| Variable costs per order | 90 (product, shipping, fees) |
| Purchases | 50 |
| Impressions | 200,000 |
The tool shows the same results:
| Output | Working | Result |
|---|---|---|
| Contribution margin | 150 − 90 | 60 per order (40 percent) |
| Break-even ROAS | 1 ÷ 0.40 | 2.5 |
| Break-even CPA | Contribution margin | 60 |
| Break-even CPM | 60 × (50 ÷ 200,000) × 1,000 | 15.00 |
All three limits say the same thing in different units. At a ROAS of 2.5, every 150 of revenue costs 60 in ads, which is the full 60 of margin. Spend more than 60 per order, or pay a CPM above 15.00 at this conversion rate, and each order loses money.
How do you use break-even ROAS when reading results?
Put your actual ROAS next to the break-even figure. Above it, each attributed order covers its ad cost; below it, each one loses money before fixed costs.
| Actual ROAS (with break-even 2.5) | What it means per order |
|---|---|
| 3.0 | Covers its ad cost and leaves margin |
| 2.5 | Covers its ad cost exactly, zero left |
| 2.0 | Ad cost is higher than the margin |
A business with repeat customers can choose to run below break-even ROAS on the first order and earn the difference back later. The LTV calculator shows how much a customer is worth over time, which tells you how far below break-even you can go.
Break-even ROAS at different margins
Break-even ROAS rises fast as margin falls. The table is plain arithmetic, 1 ÷ margin ratio, for common margin levels.
| Contribution margin ratio | Break-even ROAS |
|---|---|
| 0.60 | 1.67 |
| 0.50 | 2.0 |
| 0.40 | 2.5 |
| 0.30 | 3.33 |
| 0.25 | 4.0 |
| 0.20 | 5.0 |
Going from a 0.40 margin to 0.25 raises the ROAS your ads need from 2.5 to 4.0. That is why a shipping price increase or a new discount code can turn profitable ads into unprofitable ones without any change to the ads themselves.
What are the limits of this calculator?
The calculator is exact arithmetic on your inputs. The weak point is usually the variable cost figure.
- Missing costs. Leaving out shipping, payment fees or returns makes break-even ROAS look lower than it is. Include every cost that scales with orders.
- Average price. If order values vary a lot, run the calculator for your main products separately.
- Fixed costs are excluded. Break-even here means each order covers its own ad cost, not that the business is profitable overall.
- Attributed ROAS. The ROAS you compare against comes from the ad platform's attribution and may differ from your store data.
Related tools and glossary entries
See the break-even ROAS glossary entry, plus ROAS, contribution margin and CPA. The contribution margin calculator helps you build the variable cost figure, the ROAS calculator gives your actual ROAS, and the CPM calculator puts break-even CPM next to your actual CPM. All free tools are on the tools page.
If you want more ad versions to test against your break-even line, see how Anglr works for brands.
Glossary: Break-even ROAS · ROAS · Contribution margin · CPA
FAQ
How do you calculate break-even ROAS?
Divide 1 by your contribution margin ratio. A product that sells for 150 with 90 in variable costs per order has a margin of 60, which is 0.40 of the price, so break-even ROAS is 1 ÷ 0.40 = 2.5.
Which costs go into break-even ROAS?
Every cost that comes with each order: product cost, shipping you pay, payment processing fees, packaging and any per-order app or fulfilment fees. Fixed costs such as salaries and rent stay out.
Should I use gross margin or contribution margin?
Contribution margin, if you know it. Gross margin usually leaves out shipping and payment fees, which makes break-even ROAS look lower than it really is.
What is the difference between break-even ROAS and target ROAS?
Break-even ROAS is where each order makes zero after its ad cost. A target ROAS is a higher number you choose so that each order also leaves the profit you want.
What is break-even CPA?
It is the most you can pay in ad spend for one order without losing money on it, equal to your contribution margin per order. In the example on this page it is 60.
Sources
Checked: 12 Oct 2026