How do I calculate break-even ROAS?

Break-Even ROAS = 1 / Profit Margin. Example: 25% margin = 1/0.25 = 4:1 ROAS needed to break even.

What margin should I use for break-even calculation?

Use NET profit margin after all costs: product cost, shipping, payment fees, returns, and any overhead allocated to the product.

What is a good ROAS above break-even?

Aim for 30-50% above break-even. If break-even is 3:1, target 4:1 to 4.5:1 for healthy profit.

Why isn't my ROAS target being hit?

Common reasons: wrong audience, weak creative, competitive market, or unrealistic target based on incorrect margin calculations.

Break-Even ROAS Calculator | Find Your Minimum Profitable ROAS

Break-Even ROAS Calculator

Know your break-even point before you scale.

Calculate your break-even ROAS based on profit margin. Know the minimum ROAS needed before scaling ads. Free calculator for e-commerce and dropshipping.

TL;DR - What You Need to Know

Stop guessing if your ads are profitable. Enter your profit margin to instantly see the minimum ROAS you need to break even. Essential for e-commerce, dropshipping, and any business running paid ads.

Break-Even from Margin

Input profit margin, get minimum ROAS

Revenue from Ads ($)

Ad Spend ($)

Profit Margin (%)

Industry Benchmarks

Good ROAS

Varies by margin

Average ROAS

Break-even + 30-50%

Break-Even Tip

Dropshipping (15% margin): 6.67 ROAS. E-commerce (30%): 3.33 ROAS. SaaS (70%): 1.43 ROAS.

Sources: Shopify E-commerce Benchmarks 2024, Oberlo Dropshipping Statistics, SaaS Capital Growth Metrics (Verified: 2024-12)

Break-Even ROAS by Profit Margin

This Calculator Is For

E-commerce owners unsure if their ROAS is profitable
Dropshippers with thin margins needing precise calculations
Marketing managers setting realistic ROAS targets
Media buyers optimizing for profitability, not just ROAS

Not Ideal For

Those with subscription models—LTV calculations are different
Those looking for basic ROAS formula—see our main calculator

Real-World Examples

Dropshipping Break-Even

Scenario: Product sells for $30, costs $18 from supplier, $3 shipping = $9 profit = 30% margin.

Calculation: Break-Even ROAS = 1 / 0.30 = 3.33:1

Insight: To make $3 profit per sale on ads, need 4:1+ ROAS. At 3:1, you lose money.

E-commerce with Returns

Scenario: Product margin is 40% before returns. 15% return rate effectively reduces margin to 34%.

Calculation: Adjusted Break-Even = 1 / 0.34 = 2.94:1

Insight: Many forget returns when calculating break-even—it's a costly mistake.

Pro Tips

Use NET profit margin, not gross margin, for accurate calculations
Include ALL costs: COGS, shipping, returns, payment fees, overhead
For dropshipping, factor in supplier costs and refund rates
Set target ROAS 30-50% above break-even for sustainable profit
Review break-even quarterly as costs change

Common Mistakes to Avoid

Using gross margin instead of net profit margin

Include shipping, returns, payment fees, and overhead in your margin calculation

Setting ROAS targets without knowing break-even

Calculate break-even first, then add your desired profit margin on top

Using one break-even for all products

Different products have different margins—calculate separately for accuracy

Frequently Asked Questions

Related Calculators

Dropshipping →Ecommerce →ROAS Calculator →

Get Weekly ROAS Optimization Tips

Join 2,000+ advertisers receiving actionable insights on improving ad performance and scaling profitable campaigns.

抢先体验新功能

订阅邮件，新工具上线第一时间通知你。不发垃圾邮件，只发产品更新。

Free forever. Unsubscribe anytime. No spam.