This break-even ROAS calculator answers one question: how much revenue does each dollar of advertising need to bring in before a first order stops losing money? It uses your numbers, not a benchmark. The result is the floor, not a target.
Enter revenue and variable costs on a consistent basis
Use the average revenue from one order, and the costs that come with that order and would not exist without it. Leave advertising out: the calculator works out how much of that the order can carry.
- Product cost: what you paid for the goods in the order.
- Pick, pack and shipping: what you pay to get it to the customer, less any shipping the customer pays you.
- Payment and platform fees: card fees and any per-order platform charges.
- Other per-order costs: packaging, inserts, the allowance you make for returns.
Enter every figure on the same basis, either all excluding GST or all including it. Mixing the two quietly moves the answer.
See your contribution and break-even result
The result updates as you type. Contribution before media is what each order leaves to pay for advertising. Break-even ROAS is the revenue each $1 of ads must bring in for that order not to lose money. Try the worked example to check the arithmetic against the table further down.
Your numbers, per order
Your figures stay in your browser. Nothing is sent, saved or added to the page address.
Your result
Break-even ROAS
- Contribution before media
- Contribution margin
Enter your average order revenue to see a result.
Assumptions used
All figures per order, excluding GST. Variable costs entered: $0.00.
First-order only. Excludes overheads, agency fees, stock timing and repeat purchases.
Understand the formula with a worked example
Two lines of arithmetic sit behind the result. First-order contribution is what is left from the order before any advertising. Break-even ROAS is revenue divided by that contribution.
Contribution before media = revenue − variable costs
Break-even ROAS = revenue ÷ contribution, when contribution is above zero
| Inputs | Contribution | Break-even ROAS | What it means |
|---|---|---|---|
| Revenue $100, variable costs $60 | $40 | 2.50× | Each $1 of ads must bring in $2.50 of revenue just to break even on the first order. |
| Revenue $100, variable costs $100 | $0 | None | Nothing is left to pay for advertising. No return on ads can reach break-even on these numbers. |
| Revenue $0 | Not calculable | None | There is no revenue basis to divide by. Check the inputs. |
The same arithmetic explains why two stores with the same average order can need very different returns. More on that in what a good ROAS is for your business, and on the difference between platform and store-wide measures in MER vs ROAS.
Check what the result does not cover
Break-even ROAS is a first-order number. It tells you when one order pays for the advertising that won it. It does not tell you whether the business makes money.
-
Overheads.
Rent, wages, software and your own pay are not in the result. A store can beat break-even on every order and still lose money each month.
-
Agency and freelancer fees.
Leave them out of variable costs unless you allocate them on a stated basis, for example a monthly fee divided by expected orders. Say which basis you used.
-
Stock and cash timing.
Stock is often paid for months before it sells. A campaign that breaks even on paper can still drain cash. Setting an ecommerce marketing budget covers the timing.
-
Repeat purchases.
Future orders can make a first-order loss worth taking, but only if the business can fund the wait and the repeat orders actually arrive. Do not assume them into this number.
-
Which revenue the platform reports.
Ad platforms often claim more revenue than the store records. Compare like with like.
If the result looks impossible to hit, the fix is usually in the offer or the costs, not the ads. How to improve profit without chasing more orders and your ROAS target is a requirement, not a price explain why.