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Break-Even ROAS Calculator for Shopify Stores
Break-even ROAS is the return on ad spend where an ad campaign stops losing money. Below it, every sale costs you more than it earns. Above it, every extra dollar of ROAS is profit. It depends entirely on your margins, which is why a '4x ROAS' rule of thumb is wrong for most stores.
The formula
Break-even ROAS = 1 ÷ contribution margin before ads (as a decimal)
How to use this calculator
- Enter your average order value, excluding VAT or sales tax.
- Add the product cost (COGS) and the shipping and fulfillment cost for an average order.
- Add payment fees and your return rate as a percentage of revenue.
- Set the profit margin you want after ad spend to see your target ROAS.
Want the full picture? Read the guide: Break-Even ROAS: The Number That Decides If Your Ads Make Money.
Frequently asked questions
What is a good break-even ROAS?
Lower is better. A break-even ROAS under 2.0x (a contribution margin above 50%) gives you room to scale ads. Above 3.0x, paid acquisition becomes hard and you need strong repeat purchase rates.
What is the difference between break-even ROAS and target ROAS?
Break-even ROAS is where profit after ads is zero. Target ROAS includes the profit margin you want to keep, so it is always higher. Use break-even to kill losing campaigns and target ROAS to set bids.
Should I use platform ROAS or blended ROAS?
Compare your break-even against blended ROAS (total revenue divided by total ad spend) for business decisions. Ad platforms tend to over-credit themselves, so platform ROAS usually looks better than reality.
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