Break Even ROAS Calculator

Use our Free Break Even ROAS Calculator to find out if your Facebook, Instagram, TikTok or Snapchat Ads are profitable!

Break Even ROAS Calculator

What is Break Even ROAS?

Break Even ROAS (Return on Ad Spend) tells you the minimum ROAS you need to cover your costs without making a loss. It’s the point where your ad revenue equals your total expenses. You’re not losing money, but you’re not making a profit either.

Let’s say you sell a product for $100 and your total cost (including product cost, shipping, packaging, etc.) is $60. In this case, your Break Even ROAS would be 1.67. That means, for every $1 you spend on ads, you need at least $1.67 in return to break even.

If your ROAS is below the break-even point, you’re losing money. If it’s above, you’re making a profit.

Knowing this number helps you make better decisions with your ad budget and pricing strategy.

Why is Break Even ROAS Important?

Understanding your Break Even ROAS is essential to protect your business from unprofitable ad spending. Without it, you’re shooting in the dark.

Here’s why it’s so important:

  • Avoid losses: It tells you the lowest ROAS you can afford.
  • Set goals: Helps define clear performance goals for your marketing team.
  • Optimize ads: Quickly see which campaigns are worth continuing.
  • Improve pricing strategy: Know whether your product price supports ad spend.
  • Stay in control: Helps you stay profitable even with changing costs.

In short, Break Even ROAS gives you a safety line. You’ll know when to scale up and when to pull back.

How to Calculate Break Even ROAS?

The formula for Break Even ROAS is simple:

Break Even ROAS = 1 / Profit Margin

Let’s break it down:

  1. Calculate your Profit Margin
    Profit Margin = (Selling Price – COGS) / Selling Price
  2. Divide 1 by your Profit Margin

Example:

  • Selling Price = $100
  • COGS (Cost of Goods Sold) = $60
  • Profit Margin = (100 – 60) / 100 = 0.40
  • Break Even ROAS = 1 / 0.40 = 2.5

This means you need to make $2.50 in revenue for every $1.00 you spend on ads, just to break even.

Use our calculator to do this instantly, without the math stress.

FAQs

What is COGS?

COGS stands for Cost of Goods Sold. It’s the total cost to produce or purchase your product. It includes:

  • Product manufacturing cost
  • Shipping and handling
  • Packaging
  • Platform or transaction fees (like Shopify, PayPal)
  • Any other direct costs

COGS is key to calculating profit margins and break-even points.

What is ROAS?

ROAS stands for Return on Ad Spend. It measures how much revenue you earn for every dollar spent on advertising.

Formula:
ROAS = Revenue from Ads / Ad Spend

Example:
If you spend $500 on ads and make $1,500 in revenue, your ROAS is 3.0.

It tells you if your ads are performing well. The higher the ROAS, the better.

How does Break Even ROAS differ from ROAS?

  • ROAS tells you how your ads are performing.
  • Break Even ROAS tells you the minimum performance needed to avoid losses.

Think of Break Even ROAS as the “zero line”. If your actual ROAS is above it, you’re profitable. If it’s below, you’re losing money.

So, Break Even ROAS is your baseline. ROAS is the result you’re tracking against it.

Why should I use a Break Even ROAS calculator?

A calculator saves time and removes guesswork. It gives you instant results and clarity.

Here’s how it helps:

  • Makes campaign planning easy
  • Helps decide when to scale or stop ads
  • Supports smarter pricing
  • Works for both new and experienced marketers

No more messy spreadsheets or mental math. Just input your product price and COGS and get your Break Even ROAS instantly.

Can I use this calculator for different advertising platforms?

Yes, you can use it for any platform where you spend on ads:

  • Google Ads
  • Facebook/Instagram Ads
  • TikTok
  • Pinterest
  • LinkedIn
  • YouTube

Break Even ROAS is platform-agnostic. As long as you know your cost and price, the calculation remains the same.

Does the calculator account for VAT/GST or any other taxes?

Our calculator does not include taxes by default. If you want accurate results:

  • Exclude taxes from the selling price
  • Or include taxes in your COGS if they reduce your profit

It depends on how you handle VAT/GST in your accounting. You can adjust inputs accordingly.

How often should I recalculate my Break Even ROAS?

You should recalculate whenever there’s a change in:

  • Product cost
  • Shipping fees
  • Ad budgets
  • Selling price
  • Discounts or promotions

Markets change, and so do your margins. Recheck your Break Even ROAS every few weeks or whenever your costs shift.

How to Calculate Break-Even ROAS for an E-Commerce Store With Multiple Products?

For multiple products, calculate Break Even ROAS individually for each one. That’s the most accurate way.

However, if you want a general number:

  1. Find the average selling price
  2. Find the average COGS
  3. Use the formula:
    Break Even ROAS = 1 / ((Average Price – Average COGS) / Average Price)

But remember: not all products have the same margin. Tracking each one gives better control and insights.

Is the calculator free to use?

Yes, 100% free. No sign-up, no credit card needed.

You can use it as many times as you want, for different products or campaigns. It’s built to help marketers, e-commerce store owners, and anyone running paid ads.

Can this tool help in pricing strategy?

Absolutely. If your Break Even ROAS is too high, it might mean:

  • Your product is underpriced
  • Your cost is too high
  • You need to increase your average order value

This tool helps you reverse-engineer your prices. You can try different price points and see how it affects your ROAS. That makes it easier to find a sweet spot for profit.

Is it suitable for e-commerce businesses?

Yes, this calculator is perfect for:

  • Dropshipping stores
  • Print-on-demand brands
  • D2C brands
  • Amazon or Etsy sellers
  • Subscription box companies
  • Online retailers

Anyone who spends money on ads to sell physical or digital products can benefit from knowing their Break Even ROAS.

How do I interpret the results?

Here’s a quick guide:

  • Your ROAS is below Break Even → You’re losing money. Rework your costs or improve your ads.
  • Your ROAS is equal to Break Even → You’re just covering your costs. No profit yet.
  • Your ROAS is above Break Even → You’re profitable. The higher the number, the better the margin.

Keep your Break Even ROAS in mind when reviewing campaigns. It’s your benchmark for smart spending.

Want to make data-backed decisions with your ad budget?
Use our Break Even ROAS Calculator now and know your profit line instantly!