Break-even ROAS
Profitable before advertising1.92x
Expected retained revenue after refunds divided by maximum break-even CPA. Not a platform-reported ROAS figure.
Break-Even ROAS Calculator
Calculate the break-even ROAS, maximum CPA, and ACoS you can afford from product costs, fees, and expected refunds. Advertising spend is the unknown being solved for—not an input.
Currency is for display only. Payment and platform fees are percentages and amounts you enter; this tool has no marketplace or ad-platform presets. Revenue in ROAS and ACoS is expected retained revenue after refunds, which can differ from a platform-reported conversion value. The calculator estimates economic thresholds. It does not predict campaign performance.
Inputs
Formatting only. The formulas do not convert currencies.
Advanced return assumptions
A fully refunded order is modeled with no retained customer revenue. Product, fulfillment/packaging, payment fees, and platform fees are not assumed always recovered or always lost; each has its own loss rate. Other variable cost is treated as spent on the refunded order. Defaults are conservative (100% lost).
Results
Maximum break-even CPA
$24.75
Expected pre-ad contribution per order. The most you can spend acquiring an order and still break even.
Break-even ACoS
52.1%
Maximum break-even CPA divided by expected retained revenue. Equal to 1 ÷ break-even ROAS when ROAS is defined.
Expected contribution margin
52.1%
Expected pre-ad contribution divided by expected retained revenue.
Expected pre-ad contribution / order
$24.75
Average contribution after product, fulfillment, packaging, other variable costs, and fees—before advertising.
Target profit
Target profit margin
20.0%
The share of expected retained revenue you want left after advertising.
Target profit / order
$9.50
Expected retained revenue × target profit margin.
Target maximum CPA
$15.25
Expected pre-ad contribution minus target profit dollars.
Target ROAS
3.11x
Expected retained revenue divided by target maximum CPA.
Target ACoS
32.1%
Target maximum CPA divided by expected retained revenue.
Breakdown
| Item | Amount |
|---|---|
| Gross order revenue (charged) | $50.00 |
| Expected refund impact (revenue refunded) | -$2.50 |
| Expected retained revenue | $47.50 |
| Expected product cost | -$15.00 |
| Expected fulfillment / shipping | -$5.00 |
| Expected packaging | -$1.00 |
| Expected other variable costs | -$0.00 |
| Expected payment processing fees | -$1.75 |
| Expected platform fees | -$0.00 |
| Expected pre-ad contribution | $24.75 |
| Item | Amount |
|---|---|
| Successful-order pre-ad contribution | $27.25 |
| Refunded-order pre-ad contribution | -$22.75 |
| Expected mix (not a single-order result) | $24.75 |
Formula and methodology
Formula
Gross order revenue = selling price + shipping charged to the customer.
Payment fee = gross order revenue × payment percentage + fixed payment fee. Platform fee = gross order revenue × platform percentage. Both rates are entered by you; there are no marketplace presets.
Successful-order pre-ad contribution = gross order revenue − product cost − fulfillment − packaging − other variable cost − payment fee − platform fee. Advertising is not deducted.
Refunded-order pre-ad contribution assumes no retained customer revenue: 0 − (product cost × product-cost-lost rate) − ((fulfillment + packaging) × fulfillment-lost rate) − other variable cost − (payment fee × payment-fee-lost rate) − (platform fee × platform-fee-lost rate).
Expected pre-ad contribution = (1 − refund rate) × successful contribution + refund rate × refunded contribution. Expected retained revenue = (1 − refund rate) × gross order revenue.
Contribution margin = expected pre-ad contribution ÷ expected retained revenue when retained revenue is greater than zero.
Break-even CPA = max(0, expected pre-ad contribution / order). Break-even ROAS = expected retained revenue ÷ break-even CPA when that CPA is greater than zero. Break-even ACoS = break-even CPA ÷ expected retained revenue when retained revenue is greater than zero.
Target profit / order = expected retained revenue × target profit margin. Target maximum CPA = expected pre-ad contribution − target profit dollars. Target ROAS = expected retained revenue ÷ target maximum CPA when that CPA is greater than zero.
Estimated ad cost at a current ROAS = expected retained revenue ÷ current ROAS. Estimated profit after ads = expected pre-ad contribution − that ad cost.
Assumptions
This calculator measures marginal order-acquisition economics. It does not allocate monthly rent, payroll, subscriptions, taxes, or a fixed ad budget into the per-order figures.
Refunded orders are modeled as fully refunded: no leftover customer revenue. Loss rates control how much product cost, fulfillment/packaging, payment fees, and platform fees remain after a refund. Other variable cost is treated as spent on the refunded order. Defaults (100% lost) are conservative starting points, not a claim about every processor or warehouse.
ROAS and ACoS here use expected retained revenue after refunds. Ad platforms may report a different conversion value because of attribution windows, refund handling, and reporting rules. A current-ROAS comparison is an estimate and is most meaningful when the platform's conversion-value basis reasonably matches this revenue basis.
What is included
Selling price or AOV, shipping charged, product cost, fulfillment, packaging, other variable cost per order, user-entered payment and platform fees, expected refunds with editable loss rates, an optional target profit margin, and an optional current ROAS multiple.
What is excluded
Advertising cost as an input, monthly overhead, taxes, customer lifetime value, repeat purchases, attribution modeling, blended MER, agency fees, fixed monthly ad budgets, and marketplace or ad-network fee presets. The calculator does not call Google, Meta, TikTok, or Shopify advertising APIs.
What this calculator estimates
It solves advertising thresholds from product costs, fees, and expected refunds. Advertising spend is not an input. The results are the break-even ROAS (also written breakeven ROAS), the maximum break-even CPA, and the matching break-even ACoS. If you enter a target profit margin, it also reports the target ROAS and target ACoS needed to leave that margin after ads. An optional current ROAS estimates profit at that multiple. Do not enter advertising cost per order; that is the unknown. For what the metric means and the usual mistakes, read Break-Even ROAS. When refund rate or product cost changes the room left for ads, the e-commerce profit sensitivity analysis shows those shifts on a modeled order. It is not campaign history.
How to read the results
Break-even ROAS is the multiple at which expected profit after advertising is zero. It is usually above 1.0x because product cost, fulfillment, packaging, fees, and refund losses already consume part of retained revenue. Break-even CPA is that leftover, in dollars per order. Break-even ACoS is the same ceiling as a percentage of retained revenue: when ROAS is defined, ACoS equals 1 ÷ ROAS. A 2.0x break-even ROAS is a 50% break-even ACoS. None of those figures is profit by itself.
Target ROAS is higher than break-even when you reserve a profit margin on expected retained revenue. A current ROAS above break-even can still sit below that target. The status on the result compares current ROAS only with break-even. If contribution is already zero before ads, the calculator does not invent a positive ad allowance.
ROAS and ACoS here use expected retained revenue after refunds. An ads platform can report pre-refund sales, a different shipping treatment, or an attribution window. Compare them only when those revenue definitions are close. Monthly rent, payroll, and subscriptions are not inside this per-order ceiling.
Worked example
These figures are an illustration, not recommended prices or fees. They use the same engine and default scenario as the tool: selling price $50.00, shipping charged $0.00, product cost $15.00, fulfillment $5.00, packaging $1.00, payment fee 2.9% + $0.30, platform fee 0.0%, 5.0% refunds, conservative 100% cost-loss assumptions, and a 20.0% target profit margin. The break-even ROAS guide explains why target ROAS sits above break-even when you want profit left after ads.
- Expected retained revenue: $47.50
- Expected pre-ad contribution / order: $24.75
- Break-even CPA: $24.75
- Break-even ROAS: 1.92x
- Break-even ACoS: 52.1%
- Target ROAS at 20.0% profit margin: 3.11x
- Target ACoS: 32.1%
- At a current ROAS of 3.0x, estimated profit / order after ads: $8.92 (above break-even, below the 3.11x target)
Limitations
Results are planning estimates, not accounting, tax, or legal advice. The model is for a single expected order, not LTV, subscribe-and-save, or blended MER. It does not simulate auction dynamics, creative testing, or incrementality. Currency codes format numbers only.
Frequently asked questions
Should I enter my advertising cost per order?
No. Advertising is what this calculator solves for. Use the E-commerce Profit Calculator when you already know CPA and want expected profit.
Is break-even ROAS the same as a good ROAS?
No. Break-even is zero expected profit after ads. A target margin produces a higher required ROAS. This tool does not label a multiple as good or poor, and it does not use industry benchmarks.
Does this include marketplace fees automatically?
No. Enter the payment and platform percentages you pay. There are no Shopify, Etsy, or TikTok Shop presets on this page.
Are monthly costs included?
No. This is a per-order contribution threshold. Rent, payroll, and subscriptions would tighten an all-in requirement if you allocated them yourself.
Related tools
Read Break-Even ROAS for the relationship between contribution, CPA, ACoS, and target ROAS. To estimate profit after a known ad CPA, use the E-commerce Profit Calculator. To solve a selling price from a target margin, use the Product Pricing Calculator.