Break-Even ROAS Calculator

How it works

Finds the return on ad spend you need to break even and to hit your profit goal, plus the most you can pay per sale and per click.

1. Effective margin = Gross margin % minus Payment processing %. Break-even ROAS = 100 ÷ effective margin. If effective margin is zero or less, break-even shows as infinite.
2. Target ROAS = 100 ÷ (effective margin minus Desired profit %). If desired profit is as large as the effective margin, no ad spend can reach it and the target shows as infinite.
3. Max cost / sale = (effective margin minus Desired profit %) × Average order value. Max cost / click = that × Conversion rate %. Both show a dash when no profit room is left.
4. The verdict compares Your current ROAS with the two lines: at or above target is profitable, at or above break-even covers costs, below break-even loses money. A current ROAS of 0 gives no verdict.
5. The what-if rows each change one thing: margin plus 5 points, processing at 2%, order value plus 10%, or conversion rate doubled. The rest of the formula stays the same.

Questions

What is gross margin here?

Revenue minus the direct cost of the sale, such as product, materials or sub-labor, before ads and overhead. Ad spend comes out of this pool, so enter it before ads.

Why are payment fees subtracted?

Processing fees come off every sale, so the tool subtracts them from your margin first. The example value is 2.9%. Set it to your own rate. The result is the effective margin.

What does the infinity sign or a dash mean?

Your costs, or costs plus the profit you want, use up the whole margin, so no ad return reaches the goal. Raise margin, lower fees, or lower the profit target to get a number.