Free tool
Use this break-even ROAS calculator to understand the return on ad spend you need to cover product costs, fees and fulfilment before your paid media becomes profitable.
Break-even ROAS
2.4×
Target profitable ROAS
3.75×
Max allowable CPA
£25
Where your current ROAS sits
Profitable, but below your target
Enter the price of a typical product, your gross margin after cost of goods, and the per-order shipping and fee costs. Add the profit margin you want to keep, and optionally your current ROAS. The calculator returns your break-even ROAS, the target ROAS needed to hit your margin, the maximum CPA you can pay per sale, and — if you entered a current ROAS — your profit per sale and where you sit against the floor.
Break-even ROAS is the minimum return on ad spend needed for advertising revenue to cover product costs and associated fees. The engine is contribution margin: the share of each sale’s price left after COGS, shipping and fees. Break-even ROAS is simply 1 ÷ contribution margin, because at break-even your ad cost per sale equals that contribution. The target ROAS pushes the floor higher by reserving your desired profit margin first, and the maximum allowable CPA is the cash contribution itself — the most you can pay to win a sale and still break even.
For ecommerce brands, break-even ROAS defines the exact point where paid media moves from revenue generation to profitable growth. It turns a vague “is this working?” into a hard number that bids, budgets and channel decisions can be measured against. Crucially, it varies by margin: a low-margin range needs a far higher ROAS just to stand still, which is why blanket ROAS targets across a catalogue quietly lose money on the thin-margin lines.
Treat break-even ROAS as a line you never cross and target ROAS as the number you actually plan to. If your current ROAS sits above target, there is profitable headroom to scale — confirm it with the marginal ROAS calculator so you are reading the next pound, not the average. If it sits between break-even and target, you are profitable but under-earning; if it is below break-even, every extra sale costs you money. For the profit view rather than the revenue view, use the POAS calculator.
ElenIQ’s Dex treats your break-even and target ROAS as the profitability floor for every forecast and scenario, so budget recommendations never push a channel below the point where spend stops paying. It then forecasts how much profitable headroom remains — the kind of guardrail described in ad spend forecasting.
Break-even ROAS is the minimum return on ad spend at which advertising revenue exactly covers the cost of the product, fees and fulfilment. Below it, paid media loses money; above it, it starts to generate profit. It is calculated as 1 ÷ contribution margin.
Work out the contribution each sale makes after COGS, shipping and fees, then divide it by the price to get the contribution margin. Break-even ROAS = 1 ÷ contribution margin. If each sale contributes 40% of its price, break-even ROAS is 2.5×.
The thinner the margin, the higher the ROAS you need just to break even. A 60% contribution margin breaks even at about 1.7×; a 25% margin needs 4×. That is why low-margin businesses have far less room for inefficient spend.
Break-even ROAS is the floor — the point of zero profit. Target ROAS sits above it and bakes in the profit margin you actually want to keep. You set bids and budgets to the target, and treat break-even as the line you must never fall below.
ElenIQ uses your break-even and target ROAS as the profitability floor for forecasts and scenarios, so budget recommendations never push a channel below the point where spend stops paying. Dex then forecasts how much profitable headroom each channel still has.
Use Dex to forecast revenue and ROAS scenarios against your break-even and target floors before increasing spend.
Explore ad spend forecasting