Break-Even ROAS Calculator
Find the minimum ROAS and maximum cost per acquisition you can afford before an order becomes unprofitable — with every assumption shown.
Last reviewed August 13, 2026
How to use this calculator
- Enter your Average Order Value using the same revenue basis your ad platform reports.
- Fill in your product cost — the only other required field. Everything else can stay blank if it doesn't apply; blank is treated as $0 or 0%.
- Press Calculate.
- Check Break-Even ROAS and Break-Even CPA first — these are the numbers to compare against your ad campaigns.
- Review the scenario table to see how profit changes as your actual ROAS improves above break-even.
How the calculation works
Expected Net Revenue = AOV - (Refund Rate x AOV)
Total Non-Ad Costs =
Product Cost
+ Shipping Cost
+ Packaging Cost
+ Platform Fees
+ Payment Processing Fees
+ Other Variable Cost
+ Allocated Overhead
Contribution Before Advertising =
Expected Net Revenue
− Total Non-Ad Costs
Break-Even CPA = Contribution Before Advertising
Break-Even ROAS = AOV / Break-Even CPA
Break-Even Ad Cost % = (Break-Even CPA / AOV) x 100Platform and payment processing fees are calculated on your full AOV — this calculator's assumption, not a universal marketplace rule. Because AOV isn't split into product revenue and customer-paid shipping here, the refund rate also applies to the full AOV, which is a simplification rather than a description of how refunds universally work.
Break-Even ROAS uses the AOV you entered as its revenue basis. For the closest comparison with your ads dashboard, use the same pre-refund revenue basis your conversion tracking uses. Your expected refund rate is already built into the spending limit itself (Break-Even CPA), so it doesn't need to be applied again when comparing against your dashboard's reported ROAS.
Worked example
A seller has a $60.00 average order, a $15.00 product cost, $6.00 actual shipping, $0.50 packaging, a 10% platform fee, 2.9% + $0.30 payment processing, a 5% refund rate, and no allocated overhead.
- Average Order Value
- $60.00
- Estimated Refunded Revenue
- $3.00
- Expected Net Revenue
- $57.00
- Total Non-Advertising Costs
- $29.54
- Contribution Before Advertising
- $27.46
- Break-Even CPA
- $27.46
- Break-Even ROAS
- 2.18x
- Break-Even Ad Cost %
- 45.77%
Assumptions and Limitations
- Average Order Value uses the revenue basis you enter — this calculator doesn't assume any specific ad platform's revenue basis, and doesn't claim that any platform automatically includes or excludes shipping or tax.
- For the closest comparison with your ads dashboard, use the same pre-refund conversion-value basis your conversion tracking uses.
- Sales tax is not modeled separately. If your ad platform's conversion value includes sales tax, its reported ROAS may not be directly comparable to this calculation.
- Percentage fees are calculated on your full AOV — this calculator's assumption, not a universal marketplace rule.
- Because AOV isn't split into product revenue and customer-paid shipping, the estimated refund rate applies to the full AOV — a simplification, not a universal refund rule.
- Fee treatment after refunds varies by platform and payment processor. This calculator conservatively assumes fees are not recovered.
- Returned inventory recovery, return shipping, and refunded marketplace commissions are not modeled.
- Leaving Allocated Overhead blank calculates contribution-level break-even, not full-company profitability.
- Customer lifetime value and repeat purchases are not modeled — this is a single-order calculation.
- Ad platforms may report attributed revenue that doesn't equal true incremental sales — use these results as a guide, not an exact guarantee.
- This calculator is for general informational purposes only and is not tax, financial, legal, or investment advice.
See our methodology for how we build, document, and review every calculator's formulas.
Frequently asked questions
What is break-even ROAS?
The minimum return on ad spend your campaigns need to hit before an order stops being profitable — the point where ad-attributed revenue, at that ROAS, fully covers product cost, fulfillment, fees, and your expected refund rate.
How is break-even ROAS different from regular ROAS?
Regular ROAS just compares ad-attributed revenue to ad spend — it never subtracts product cost, fees, or refunds, so a high ROAS doesn't guarantee profit. Break-even ROAS folds all of your non-advertising costs into that same ROAS-shaped number, so it tells you the minimum efficiency needed to avoid a loss.
What is break-even CPA?
The maximum you can spend acquiring one order through advertising before that order stops being profitable — the same threshold as break-even ROAS, expressed as a dollar amount instead of a ratio.
Why does a higher cost structure require a higher ROAS?
Break-Even ROAS is your AOV divided by Break-Even CPA. As product cost, fees, refunds, or allocated overhead increase, Break-Even CPA shrinks — and dividing the same AOV by a smaller CPA produces a larger required ROAS.
Should I include refunds?
Yes. Enter your estimated refund rate so the calculator reduces expected revenue accordingly — leaving it at 0% assumes no orders are ever refunded, which will overstate how much you can afford to spend on ads.
Should I include fixed overhead?
It's optional. Leave Allocated Overhead blank for a contribution-level break-even (product, fulfillment, fees, and refunds only). Enter a per-order estimate of costs like software or payroll for a more complete business break-even — this calculator doesn't allocate monthly overhead automatically, since it doesn't ask for your order volume.
Why might my ad dashboard ROAS differ from this calculator?
Your ad platform's reported ROAS only tracks attributed revenue against spend — it doesn't know your product cost, fees, or refund rate. Break-even ROAS is the target that dashboard number needs to clear, not a prediction of what it will show. Differences in attribution windows or conversion-value settings can also mean your dashboard uses a different revenue basis than the AOV you entered here.
Does this calculator include customer lifetime value?
No — this is a single-order calculation. If your customers frequently reorder, you may be able to profitably spend more to acquire them than this calculator's break-even figure suggests.
What does "No finite ROAS" mean?
It means your contribution before advertising is exactly $0 — you break even without spending anything on ads, so there's no ROAS, however high, that would leave room for ad spend without a loss.
The E-commerce Profit Calculator helps you calculate the profit you actually made from your sales. This calculator helps you find the ad efficiency you need before acquiring an order becomes unprofitable. Use the Profit Calculator to review sales you've already made, and this one to plan what ROAS to target before you spend.
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