Break-even ROAS Calculator
Work out your break-even ROAS and maximum cost per acquisition from price, product cost and other costs, and see the ROAS you need for a target profit.
Work out your break-even ROAS and maximum cost per acquisition from price, product cost and other costs, and see the ROAS you need for a target profit.
Before you spend on ads you need to know the lowest return that keeps you from losing money. That is your break-even ROAS. It depends on how much is left from each sale after product cost and other costs.
This calculator gives you the break-even ROAS, the most you can pay to win a customer (max CPA), and the ROAS you need if you want to keep a target profit.
Price 1000, product cost 400, other costs 100 Profit before ads: 500 Break-even ROAS: 1000 / 500 = 2.0x
Break-even ROAS comes from the profit left on one order before advertising. This tool subtracts product cost and other per-order costs from the selling price to get that profit, then divides price by it. With a price of 1,000, product cost of 400 and other costs of 100, profit is 500, so break-even ROAS is 2.0x and the maximum cost per acquisition is 500. Spending more than that on average loses money. The lower your margin, the higher the ROAS you need, and the relationship is not linear.
A profit target changes the picture. The target is entered as a percentage of the selling price. At 10 percent on the same product, you keep 100 of each 1,000 sale, which leaves 400 for advertising. Target ROAS becomes 1000 divided by 400, or 2.5x, and the maximum CPA drops to 400. If the target is larger than the margin after costs, the tool reports an error because no ad spend could satisfy it. Costs that vary by order, such as returns, are not modeled, so use averages.
The ROAS at which ad spend equals the profit left before ads. Below it each sale loses money.
No. It looks at a single order. If customers buy again, your real break-even is lower, and the LTV and CAC Calculator can help.
The profit target is larger than what remains after costs, so no ad spend could reach it.
No. It stays in your browser.
Use the price you actually keep. If your selling price includes sales tax or GST that you pass on to the government, remove it first, otherwise the margin and break-even ROAS will look better than they are.
Product cost plus other costs is equal to or above the selling price, so each sale loses money before any advertising. Raise the price or cut costs before running paid campaigns.