ROAS Calculator
Find your break-even ROAS from real unit economics — and whether your current ROAS is actually profitable.
ROAS is revenue divided by ad spend, but the number that matters is your break-even ROAS: 1 ÷ contribution margin. On a $100 order with a 47% contribution margin after COGS, fees, shipping, and refunds, break-even ROAS is about 2.12× — so a 2.0× ROAS is losing money even though it looks like a win. Enter your economics to find your real break-even.
These calculators are for planning and estimation, not accounting or financial advice. Verify against your actual platform, payment-processor, and bookkeeping figures before making budget or pricing decisions.
Break-even ROAS
2.04×
Your actual ROAS is 2.00× — losing money.
About the ROAS Calculator
Most stores track ROAS — revenue divided by ad spend — but almost nobody sets it against the right target. Your break-even ROAS is 1 divided by your contribution margin, and contribution margin is what's left after every variable cost of fulfilling an order: COGS, the payment processor's cut, shipping, pick-and-pack, and the drag from refunds. That is a very different number from gross margin, which only subtracts COGS. If your gross margin is 70% you might assume break-even ROAS is around 1.4×, but once fees, shipping, and returns come out, the real contribution margin might be 47% and break-even ROAS jumps past 2.1×. Every campaign running between those two numbers feels profitable and is quietly losing money. Two more numbers get confused with ROAS. MER — marketing efficiency ratio — is total revenue over total ad spend across every channel, and it's the honest blended picture. Platform ROAS is what Meta or Google reports for its own channel, and it's inflated by generous attribution windows that claim credit for sales those ads didn't cause. Budget to break-even against contribution margin, sanity-check the business with MER, and treat platform-reported ROAS as a directional signal, not truth.
Frequently asked questions
What is a good ROAS?+
There's no universal number — a good ROAS is any ROAS above your break-even ROAS, which depends on your margins. A store with thin margins might need 3×+ to profit, while a high-margin product breaks even below 2×. Compare against your own break-even, not a benchmark.
How is break-even ROAS calculated?+
Break-even ROAS = 1 ÷ contribution margin ratio. Contribution margin is revenue minus COGS, payment fees, shipping, pick-and-pack, and refund losses. A 47% contribution margin gives a break-even ROAS of about 2.12×.
Why shouldn't I use gross margin for break-even ROAS?+
Gross margin only subtracts COGS, so it overstates what's left to spend on ads. Using it makes break-even ROAS look lower than it is, and you'll scale spend into unprofitable territory. Always use contribution margin.
What's the difference between ROAS, MER, and platform ROAS?+
ROAS is revenue over ad spend for a campaign. MER is total revenue over total ad spend across all channels — the blended reality. Platform ROAS is what one ad platform reports for itself, inflated by its own attribution. Manage to MER and break-even; distrust platform ROAS alone.
By D.J. Gelner
D.J. Gelner is a direct-response marketer with 12+ years running growth for DTC and supplement brands, including VP-level roles. A former attorney, he builds and verifies the unit-economics math behind paid-media decisions daily.