Connect ShopifyWhat each ROAS earns you per order
| 1.5x | -$13.35 |
| 2.0x | -$0.02 |
| 2.5x | $7.98 |
| 3.0x | $13.31 |
| 4.0x | $19.98 |
Stop estimating. See your store's real numbers.
This calculator runs on averages. LTV Profit Map runs on your actual Shopify data — a free app that shows your real LTV, repeat rate, and profit by cohort in one click. No credit card, no setup.
What break-even ROAS actually tells you
Most stores judge ads against a target somebody else made up — 3x because an agency said so, 4x because it feels safe. Break-even ROAS replaces the guess with your number: the exact return where a campaign stops losing money after product cost, shipping, payment fees, and refunds. Above it, every order contributes margin. Below it, you're paying for the privilege of shipping boxes. Ad platforms won't show you this line, because they don't know your costs. You should know it before you set a single budget.
How it's calculated
Break-even ROAS is the inverse of your contribution margin. Step one: contribution margin per order — AOV minus COGS, shipping and fulfillment, payment processing, a refund allowance, and any other per-order costs. Step two: break-even ROAS = AOV ÷ contribution margin per order. Example: an $80 AOV with $28 COGS, $7 shipping, 2.9% + $0.30 processing, and a 3% refund rate keeps $39.98 per order — a 50.0% margin. Break-even ROAS = 80 ÷ 39.98 = 2.00x. A campaign reporting 2.0x in Ads Manager looks fine and earns exactly nothing.
How to read your number
Under your break-even, every attributed order loses money. At it, you're covering variable costs and contributing zero to payroll, rent, software, or profit. That's why break-even is a floor, not a target — set your working target with the profit field above. One more trap: platform ROAS blends new and returning customers. Returning customers who would have bought anyway inflate the number, which means your true bar for acquisition campaigns is higher than the blended figure. To see what a customer is worth beyond the first order, run the LTV & CAC payback calculator.
Typical ranges
Stores keeping 50–60% contribution margin break even around 1.7–2.0x. At 40% margin the line moves to 2.5x. Below 30% margin you need 3.3x or better just to tread water — at that point most paid programs struggle, and the fix is margin (pricing, COGS, shipping) before media.
Frequently asked questions
Break-even ROAS (sometimes written BEROAS) is the minimum return on ad spend at which ad-driven revenue exactly covers your variable costs — product, shipping, payment fees, and refunds. Below it a campaign loses money; above it, it contributes profit. It's calculated as AOV ÷ contribution margin per order, or 1 ÷ contribution margin percent.
There's no universal good ROAS — it depends entirely on margin. A 2.5x ROAS is profitable for a store with 55% contribution margin and a slow bleed for a store at 30%. Calculate your break-even first, then set a target above it that funds real profit.
No. Platform-reported ROAS is revenue divided by ad spend, nothing else. That's exactly why break-even ROAS matters: it folds COGS, shipping, processing fees, and refunds into the threshold so you're comparing platform numbers against reality.
Break-even ROAS is where you stop losing money. Target ROAS is break-even plus the profit you actually want: 1 ÷ (contribution margin % − desired profit %). Run campaigns against the target and treat break-even as the kill line.
Both, for different jobs. Per-campaign ROAS against your break-even tells you what to cut or scale. Blended ROAS — total revenue ÷ total ad spend, sometimes tracked as MER — tells you whether the whole program is efficient. If blended looks great but every prospecting campaign is under break-even, retargeting and brand-name searches are flattering the average.
More free tools
LTV & CAC Payback Calculator
What a customer is really worth, your LTV:CAC ratio, and how many months until ad spend pays back.
Free Shipping Threshold Calculator
The threshold that lifts AOV without eating your margin.
Ecommerce Funnel Calculator
See where your store leaks profit from session to purchase — in dollars per month.