Free tool

ROAS calculator and break-even ROAS

ROAS (return on ad spend) is the revenue your ads bring in divided by what they cost. On its own it tells you nothing: a 2.5 ROAS makes money on one product and loses money on another. Enter your numbers below to see your ROAS, the break-even ROAS for your product, and what you actually keep.

How ROAS is calculated

ROAS = revenue from ads ÷ ad spend. Spend 500 and bring in 1,500 in sales, and your ROAS is 3.00 (often written 3x or 300%).

The number that matters is the break-even ROAS, the ROAS at which ads cost exactly what they earn:

Break-even ROAS = selling price ÷ margin per order before ads, where the margin is price minus product cost, shipping and payment fees.

Above it, you make money. Below it, you lose some on every sale, even if the ROAS "looks good".

A worked example

You sell a product at 40. It costs you 12, shipping is 5, and the payment processor takes 3 % (1.20).

• Margin before ads: 40 − 12 − 5 − 1.20 = 21.80
• Break-even ROAS: 40 ÷ 21.80 = 1.83
• Maximum CPA: 21.80 per purchase. Past that, the sale loses money.

You spend 500 on ads and they bring in 1,500. Your ROAS is 3.00, well above 1.83. That is 37.5 orders, 817.50 of margin, and 317.50 of profit once the 500 of ads are paid.

Same ads, same ROAS, but a product sold at 25 with the same costs: the margin drops to 7.25 and the break-even ROAS climbs to 3.45. Your ROAS of 3.00 now loses money. That is why a target ROAS copied from someone else's product means nothing for yours.

What this calculator does not include

It counts one product per order. It leaves out refunds, returns, apps and subscriptions, taxes and your own time. If 5 % of orders get refunded, lower the margin accordingly. The profit shown is a ceiling, not a guarantee.

To learn how to structure campaigns that reach that ROAS, read how to structure a Facebook Ads campaign, TikTok Ads vs Facebook Ads and how to price a dropshipping product.

FAQ

What is a good ROAS?

There is no universal good ROAS. A good ROAS is one above your break-even ROAS. With a 50 % margin before ads, break-even is 2.00; with a 25 % margin, it is 4.00.

What is the difference between ROAS and ROI?

ROAS compares revenue to ad spend only. ROI compares profit to everything you spent. A campaign can show a 3x ROAS and still have a negative ROI if the product margin is thin.

How do I calculate break-even ROAS?

Divide your selling price by your margin per order before ads (price minus product cost, shipping and payment fees). A product sold at 40 with a margin of 20 has a break-even ROAS of 2.00.

Is ROAS the same as CPA?

No. CPA is what you pay in ads for one purchase. Your maximum CPA equals your margin per order before ads: at that cost, you break even.