The return on ad spend where a campaign stops costing you money. Everything below that line is a campaign you are paying to run.
Enter your margin and see the ROAS a campaign has to clear before it pays for itself. The page opens with example numbers so you can see it working.
Everything here is worked out in your browser. Nothing you type is sent anywhere, and there is no account to make.
What the product costs you, as a share of the order value.
Shipping, payment fees, pick and pack. Anything that grows with orders.
Optional. Turns the ROAS figure into a cost per order you can act on.
Optional. Measured against gross revenue, not against margin.
Optional. Turns the answer into a spending ceiling for the month.
Result
The numbers below are an example so the tool opens working. Replace them with yours.
What comes out
How to use it
Cost of goods as a share of the order, then the variable costs that grow with orders: shipping, payment fees, pick and pack.
A returned order is revenue that never contributed anything, so the return rate moves this number. Order value turns the ROAS into a cost per order.
The break-even figure is where the campaign pays for itself and nothing else. Enter a net profit target to see the ROAS that funds the business.
Return on ad spend is what the ad platform reports back: gross revenue divided by what you paid to get it. A 4x ROAS means four pounds of revenue for every pound of spend.
Break-even ROAS is the point where that revenue exactly covers the cost of the goods and the cost of the ads, and leaves nothing over. It is one divided by your contribution margin. A store keeping 30p of every pound breaks even at 3.33x. A store keeping 50p breaks even at 2x.
This is why two stores can report the same ROAS and only one of them is making money. The number on the platform is the same. The floor underneath it is not.
The arithmetic is one division. The part people get wrong is what goes into the divisor, and it goes wrong in the same three places every time.
Shipping and payment fees get left out, because they feel like overheads rather than order costs. They are not: they grow with every order, so they belong in the margin. Returns get left out, because the refund lands in a different month from the sale. And the profit target gets applied to margin instead of to revenue, which quietly halves it.
The calculator holds all three in the same place, and says out loud when one of them was left blank.
The tool
A refunded order contributed nothing, so it is removed before the margin is worked out rather than after.
Break-even and the ROAS your profit target needs are two different rows, because sitting on the first one is not a result.
A ROAS figure is hard to buy media against. Give it an order value and it becomes a cost per acquisition you can put into a bid.
A net profit target is applied to gross revenue, not to margin. Applying it to margin is the most common way this calculation comes out too generous.
Leave other variable costs blank and the tool treats them as zero and tells you so. Most stores sit between 5% and 15%, and that band moves the answer more than people expect.
Ask for a net profit above what is left after costs and the tool says no ROAS reaches it, instead of printing a number that cannot happen.
Reading the result
We look at your search visibility across Google and the answer engines, and tell you what is costing you orders. No charge for the first look.
In practice
Work out the break-even figure first, then decide whether the market clears it. Doing it the other way round means learning it from a bad month.
If the target sits under the break-even line, the account is being asked to lose money efficiently.
A 20% off code moves the margin, which moves the floor. Run the numbers with the discounted margin and see where the campaign has to land.
A high margin line and a low margin line reporting the same ROAS are not performing the same. This is where that shows up.
Questions
There is no good one. It is set by your margin, not by your skill. A store with a 30% contribution margin breaks even at 3.33x and a store with a 60% margin breaks even at 1.67x, and neither is doing better than the other.
That is the number this calculator is built against, so the answer it gives is comparable with what you see in the account. Be aware that platforms attribute differently from each other, so a Meta ROAS and a Google ROAS are not the same measurement even when they carry the same name.
Work in the same basis throughout. If your order values are shown including tax, your cost percentages need to be against the same figure. Mixing the two is the quickest way to a margin that looks better than it is.
Nowhere in this calculation. Break-even ROAS covers order costs and ad costs only. Rent, salaries and software are paid out of whatever contribution is left above the line, which is why sitting on break-even is not a result.
Use the rate for the period you are planning to spend in. A calculation run on an annual average will be wrong in both directions across the year, and most wrong in the months where the spend is heaviest.
No. The whole calculation runs in your browser. There is no account, no upload, and nothing typed here reaches a server.
The rest of the set
Break-even ROAS is the only version of the number that knows your margin. Above the line is profit and below it is a subsidy, and the line moves the day your costs do.
Where this comes up
