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 is break-even ROAS?
Break-even ROAS is the return on ad spend at which expected profit after advertising is zero. Below that multiple, the average order loses money once ads are included. Above it, there is room for contribution profit—before overhead and tax.
This tool does not ask you for a pre-calculated gross-margin percentage. It builds expected contribution from the same kind of unit economics used in the profit calculators, then treats advertising as the unknown you are solving for.
Why break-even ROAS matters
A campaign can look efficient in an ads manager and still be unprofitable after COGS, shipping, fees, and refunds. Break-even ROAS and maximum CPA turn those costs into a ceiling: how much you can afford to spend to acquire an order before advertising itself is the problem.
If expected contribution is already zero or negative before ads, no ROAS target will fix the offer. The calculator flags that state instead of inventing a positive advertising allowance.
Break-even ROAS formula
After mixing successful and refunded orders, break-even CPA is the expected pre-ad contribution per order (floored at zero). Break-even ROAS is expected retained revenue divided by that CPA. When contribution margin is positive, that ROAS equals 1 ÷ contribution margin on the same revenue basis.
Contribution margin and advertising
Contribution margin here is expected pre-ad contribution divided by expected retained revenue. It is the share of retained revenue that can go to ads (at break-even) or to ads plus profit (if you set a target margin). It is not a GAAP gross margin and does not include monthly overhead.
Break-even CPA
Maximum break-even CPA is the same number as expected pre-ad contribution when that contribution is positive. Spend that much per order on ads and expected profit after ads is zero. Spend more and the average order loses money.
ROAS vs CPA
CPA is a dollar cap per order. ROAS is a revenue-per-ad-dollar multiple. They describe the same constraint when they share a revenue definition: ROAS = expected retained revenue ÷ CPA. A $50 expected retained revenue against a $25 CPA is 2.0x ROAS.
ROAS vs ACoS
ACoS (advertising cost of sales) is CPA ÷ revenue, shown as a percentage. When break-even ROAS is defined, break-even ACoS equals 1 ÷ that ROAS. A 2.0x break-even ROAS is a 50% break-even ACoS on the same revenue basis. Neither figure is a profit metric by itself.
Target ROAS for a desired profit margin
A target profit margin of 20% means you want expected profit after advertising equal to 20% of expected retained revenue. Target maximum CPA is what remains of pre-ad contribution after that profit is reserved. If nothing remains, the margin is not achievable with positive ad spend.
How refunds affect break-even ROAS
Refunds reduce retained revenue and often leave product, shipping, or fee costs behind. A higher refund rate usually raises the ROAS you need, because there is less expected contribution to spend on ads. Edit the advanced loss rates if you recover inventory or fees; do not assume every cost is always lost or always recovered.
Why ad-platform ROAS may differ from actual retained profit
Platforms can credit conversions inside a click or view window, count gross sales before refunds, include shipping or exclude it, or attribute the same order to more than one click. This calculator uses expected retained revenue from the unit-economics model. Comparing a platform ROAS to break-even ROAS is useful when those revenue definitions are close, and misleading when they are not. The tool does not forecast campaign results.
Worked example
These figures are an illustration, not recommended prices or fees. They use the same engine 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%, 5% refunds, and conservative 100% cost-loss assumptions, with a 20% target profit margin.
- 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% profit margin: 3.11x
- At a current ROAS of 3.0x, estimated profit / order after ads: $8.92
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 or Shopify 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 the point where expected profit after ads is zero. A target profit margin produces a higher required ROAS. This tool does not label ROAS as good, healthy, or poor, and it does not use unsourced industry benchmarks.
Can I compare this to Meta or Google ROAS?
Only as an estimate, and only when the platform's conversion value is close to the retained-revenue basis modeled here. Attribution windows and refund timing often make the numbers differ.
Does this include Shopify or Amazon fees automatically?
No. Enter the payment and platform percentages you actually pay. For sourced Shopify plan presets and profit after a known CPA, use the Shopify Profit Calculator.
Are monthly costs included?
Not in this version. Break-even ROAS here is a per-order, contribution-level threshold. Rent, payroll, and subscriptions would tighten the true all-in requirement if you allocated them.
Related tools
To estimate profit after a known ad CPA, use the E-commerce Profit Calculator or the Shopify Profit Calculator. To solve a selling price from a target margin after ads and refunds, use the Product Pricing Calculator. For marketplace fees on Etsy, use the Etsy Fee Calculator. For TikTok Shop US referral fees, use the TikTok Shop Fee Calculator. See all listed tools on the calculators page.