Maker Label Studio
Cited category: Finance & Supply Chain

Break-Even ROAS Calculator

Calculate e-commerce contribution margin, break-even ROAS, break-even ACoS, and the ROAS needed to hit a profit target.

Inputs

Enter per-order economics before ad spend; CAC is optional and applied to the profit target.

$
Revenue per order.
$
Product cost per order.
$
Total transaction and marketplace fees.
$
Fulfillment or delivery cost per order.
$
Additional acquisition cost outside ad spend.
%
Profit after variable costs, CAC, and ad spend.

Results

Core formulas: contribution margin = (price - COGS - fees - shipping) / price; break-even ROAS = 1 / contribution margin; break-even ACoS = contribution margin.

Contribution Margin

-

Before CAC and ad spend.

Break-Even ROAS

-

Minimum ROAS before CAC.

Break-Even ACoS

-

Equals contribution margin.

Contribution Dollars

-

Maximum ad spend at break-even before CAC.

Target ROAS

-

Required ROAS for desired profit.

Target Ad Spend

-

Per order after CAC and profit target.

Enter values to calculate break-even ROAS.
Finance & Supply Chain note: this tool uses per-order e-commerce unit economics. Optional CAC is not included in the cited contribution margin formula; it is subtracted only when calculating the profit-target ROAS.

Self-Tests

Runs golden cases against the pure calculation functions for margin, break-even ROAS, and target ROAS.

Self-tests: not run

    About the Break-Even ROAS Calculator

    Performance marketers, ecommerce founders, and finance teams use a break-even ROAS calculator to find the ad return needed before campaigns lose money. Add product price, cost of goods, payment fees, shipping subsidy, returns, and other variable costs to calculate contribution margin and break-even return on ad spend. It keeps media targets tied to unit economics.

    How it works

    1. Enter selling price and all variable costs tied to each order.
    2. Include discounts, payment fees, fulfillment costs, and expected returns where relevant.
    3. Calculate contribution margin after variable costs.
    4. Use the break-even ROAS as the minimum paid-media efficiency target.

    Frequently asked questions

    How is break-even ROAS calculated?

    Break-even ROAS is 1 divided by contribution margin percentage. If contribution margin is 40%, break-even ROAS is 2.5 because each dollar of ad spend needs 2.5 dollars of revenue to cover variable costs and the ad cost.

    Should I use gross margin or contribution margin?

    Contribution margin is usually better for ad decisions because it includes variable costs beyond product cost, such as payment fees, pick-pack, shipping subsidies, returns, and marketplace fees.

    Does break-even ROAS include fixed overhead?

    Not normally. It shows the ad efficiency needed to cover variable costs and ad spend; fixed costs, payroll, rent, and profit targets require a higher ROAS or a separate budget model.

    How do discounts affect break-even ROAS?

    Discounts reduce revenue and often reduce contribution margin faster than expected. Use the discounted selling price when calculating campaign-specific break-even ROAS.

    Why is my platform ROAS different from actual profitability?

    Ad platforms report attributed revenue, not full order economics. Attribution windows, refunds, taxes, shipping, fees, and repeat purchases can make platform ROAS differ from finance-level profitability.

    References