Break-Even ROAS Calculator
Every store has one number below which advertising costs more than it brings in. Enter your order economics and this shows you where that line sits, and what you need to clear it by to actually make money.
Break-even ROAS
1.79x
You break even at 1.79x, which is comfortable. Margins this wide usually mean you can outbid competitors for the same customer. To net 20% you need 2.80x, or a cost per order under $26.83.
- ROAS for your target margin
- 2.80x
- Break-even MERThe same ratio applied to all revenue rather than platform-attributed revenue.
- 1.79x
- Contribution per orderWhat each order leaves to spend on acquiring the customer.
- $41.83
- Max cost per order at break-even
- $41.83
- Max cost per order at target
- $26.83
StoreProfit shows your actual ROAS against this break-even line every day, using real order costs and live spend from Meta, Google and TikTok.
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How this is calculated
Contribution = AOV - COGS - Shipping - Payment fees - Other costsBreak-even ROAS = AOV / ContributionTarget ROAS = AOV / (Contribution - AOV x Target margin)- AOV
- Average order value: total product revenue divided by orders, excluding tax and shipping income.
- Contribution
- What is left of an order once every variable cost except advertising is paid. This is the pot advertising spends from.
- Break-even ROAS
- Revenue divided by ad spend at the point where an order produces exactly zero profit. Spend more efficiently than this and you make money; less and you do not.
- MER
- Marketing efficiency ratio: total revenue divided by total ad spend across the whole business, including organic and repeat orders.
- Max cost per order
- The same limit expressed in currency rather than as a ratio. Most media buyers find this easier to work to than a ROAS target.
Worked example
A homeware store runs a $75 average order value and wants to know how hard it can push on Meta:
| Average order value | $75.00 | |
|---|---|---|
| COGS | - $22.00 | |
| Shipping | - $6.00 | |
| Payment fees (2.9%) | - $2.18 | $75.00 x 0.029 |
| Other costs | - $3.00 | Pick and pack, apps, returns provision |
| Contribution | $41.83 | 55.8% of order value |
| Break-even ROAS | 1.79x | $75.00 / $41.83 |
| Break-even cost per order | $41.83 | |
| ROAS for a 20% net margin | 2.80x | $75.00 / ($41.83 - $15.00) |
| Cost per order at that target | $26.83 |
Anything above 1.79x makes money on the order. To actually net 20%, the store needs 2.80x, or to keep acquisition under $26.83 per order. The gap between those two numbers is the entire operating margin of the business.
Break-even ROAS is a floor, not a target
The most common misuse of this number is treating it as the goal. Hitting exactly break-even ROAS means every order you sell produces zero profit, and the business still has to pay salaries, software, rent and tax out of nothing. Break-even is the line below which you are actively buying customers at a loss; the target is somewhere well above it, and the target ROAS field above tells you where.
Whether losing money on the first order is acceptable depends entirely on repeat purchase. A consumable with a 45% reorder rate within 90 days can rationally acquire below break-even, because the second and third orders carry no acquisition cost. A one-off high-consideration purchase cannot. If you do not know your repeat rate by cohort, assume you cannot.
ROAS and MER are the same arithmetic on different revenue
This calculator reports both and they come out identical, which is not a bug. Break-even ROAS and break-even MER are the same ratio: revenue divided by ad spend at zero profit. What differs is which revenue you compare them against. ROAS is usually measured against the revenue an ad platform claims, MER against every dollar the business took, organic and repeat included.
That distinction matters more than the number. Meta, Google and TikTok each attribute overlapping orders, so their reported ROAS figures routinely sum to more revenue than the store actually made. MER cannot be inflated that way, which is why it is the more honest number to steer by, and why a store with strong organic traffic can run a blended MER well below its per-campaign ROAS and still be healthy.
What moves the line
Contribution is the denominator, so anything that raises it lowers the ROAS you need. Cutting $3 of landed cost off the example above moves break-even from 1.79x to 1.67x, which sounds small but is roughly the difference between a campaign being viable and not. Raising AOV does the same thing twice over, because the fixed per-order costs are spread across a larger basket.
The mistake to avoid is chasing the ROAS number by cutting ad spend. Pulling back on spend raises reported ROAS and shrinks the business at the same time, because the cheapest, most efficient impressions are the ones you were always going to win. The useful question is not how to get ROAS up but how much profit total the spend produces - which is why the max cost per order figure above is often the better one to hand a media buyer.
Questions people ask
Should I use blended or platform-reported ROAS against this number?
Blended. Divide total revenue by total ad spend across every channel. Platform-reported ROAS counts the same order more than once when multiple channels claim it, so comparing it to a break-even calculated on real order economics will flatter your results.
Is it ever right to advertise below break-even ROAS?
Only when repeat purchase pays for it. If a cohort reliably orders again within a known window and you have the cash to bridge the gap, buying the first order at a loss can be correct. Both conditions have to be true - a strong repeat rate is no help if you run out of cash before the second order arrives.
Why is my break-even ROAS so much higher than other stores?
Almost always thin contribution rather than expensive ads. A store keeping 55% of each order breaks even near 1.8x; one keeping 25% needs 4.0x for exactly the same media performance. Fixing the cost side moves this number far faster than optimising campaigns does.
Should shipping income be included in AOV?
No, but net the cost. Leave shipping revenue out of AOV and enter your shipping cost after deducting what customers paid. Putting shipping income into AOV inflates it and makes break-even look better than it is.
How often should I recalculate this?
Whenever landed costs, shipping rates or product mix change, and at minimum quarterly. Freight rates and supplier prices move enough over a year to shift break-even by several tenths, and campaigns keep running against the old target long after it stopped being right.
Related calculators
- Shopify Profit Margin CalculatorEnter what one order costs you and see what you actually keep.
- True COGS and Landed Cost CalculatorThe supplier invoice is not your cost of goods.
- Shopify Fees CalculatorPick your plan and country to see what Shopify Payments actually takes from each order, what that adds up to monthly, and your effective fee rate once the subscription is counted..
Last updated August 10, 2026