Break-Even ROAS Calculator
Break-even ROAS is the minimum return on ad spend a campaign must hit to cover the variable costs of fulfilling the orders it drives. It is the single most important number for setting profitable spend targets, because it converts your unit economics into the exact ROAS floor below which growth destroys money. This free break-even ROAS calculator builds that floor from your price and variable costs, and it requires no email.
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The calculator works out your contribution margin per order, the dollars left after cost of goods, shipping and fulfillment, payment processing, and any other variable costs, then divides selling price by that margin to give the ROAS you must exceed. Every variable cost belongs in the math; leaving one out quietly raises your true break-even point and hides losses inside campaigns that look fine on a dashboard.
Use it before you scale. A target ROAS that sits comfortably above this break-even line is the difference between buying growth and buying losses.
How it works
Break-even ROAS equals selling price divided by contribution margin per order. Contribution margin is the selling price minus cost of goods, minus shipping and fulfillment, minus payment processing fees, minus any other variable cost tied to the order.
The intuition is simple: if a sale leaves you a small slice of margin, you need a large multiple of revenue to spend just enough on ads to break even. Thin margins demand high break-even ROAS, and rich margins allow you to scale at a much lower one.
Worked example
Take an $80 product with $24 in cost of goods, $8 in shipping and fulfillment, and 3% payment processing fees ($2.40). Contribution margin is 80 minus 24 minus 8 minus 2.40, which is $45.60 per order, a 57% contribution margin.
Break-even ROAS is 80 divided by 45.60, or roughly 1.75x. Campaigns above 1.75x ROAS are profitable on the first order. Spend that returns less than 1.75x is losing money even though it might clear a generic 'good ROAS' bar.
What is a good break-even ROAS?
There is no universally good break-even ROAS, because it is dictated entirely by your contribution margin. A brand with 57% margin breaks even near 1.75x, while a brand with 25% margin does not break even until roughly 4x. The lower your break-even, the more room you have to bid up, expand audiences, and scale profitably.
This is why a generically 'good' 3x ROAS can still lose money. Healthy DTC brands often run a blended ROAS of 2.5 to 4x, but if your contribution margin only supports a 4x break-even, then scaling at 3x means every incremental order loses contribution. The benchmark that matters is your own break-even line, not the portfolio average.
Separate first-order break-even from LTV-adjusted targets. The calculation here is first-order profitability, which is the conservative floor. Brands with strong repeat purchase behavior can justify acquiring below first-order break-even because lifetime value recovers the gap, but that only works if the repeat economics are real and measured. Use QRY's monthly paid media benchmarks to gauge whether the ROAS you are achieving leaves enough headroom above your break-even to fund profitable growth.
See QRY's monthly paid media benchmarks to compare your numbers against the portfolio.
Frequently asked questions
What is a good break-even ROAS?
A good break-even ROAS is as low as your margins allow, because a lower break-even leaves more room to scale profitably. A brand with 57% contribution margin breaks even near 1.75x, while a 25%-margin brand needs roughly 4x. The figure is set by your unit economics, not by an industry average.
How do you calculate break-even ROAS?
Break-even ROAS equals selling price divided by contribution margin per order. For an $80 product with $24 cost of goods, $8 shipping, and 3% payment fees, contribution margin is $45.60 and break-even ROAS is 80 / 45.60, or about 1.75x. Campaigns above that multiple are profitable on the first order.
Why can a 3x ROAS still lose money?
A 3x ROAS only earns a profit if your contribution margin supports a break-even below 3x. If thin margins push your break-even ROAS to 4x, then scaling at 3x means every incremental order loses contribution. A 'good' ROAS is meaningless until you compare it to your own break-even line.
What costs should I include in break-even ROAS?
Include every variable cost tied to fulfilling an order: cost of goods, shipping and fulfillment, payment processing fees, and any other per-order costs such as returns, packaging, or marketplace fees. Leaving a cost out understates your true break-even ROAS and hides losses inside campaigns that look profitable.
Should I target my first-order break-even ROAS or a lower number?
First-order break-even is the conservative floor for profitability on a single purchase. Brands with strong, measured repeat purchase behavior can acquire below it because lifetime value recovers the gap, but only when the repeat economics are real. If repeat behavior is uncertain, hold the line at first-order break-even.
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See how much headroom your ROAS has against QRY's managed portfolio with our monthly paid media benchmarks.
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