Break-Even ROAS Calculator

How to calculate Break-Even ROAS calculator?

Find the ROAS value at which revenue from ads exactly covers product cost and advertising expense, leaving zero profit or loss.

Key formula: Break-Even ROAS = Selling Price per Unit ÷ (Selling Price per Unit − Product Cost per Unit)

Using the Break-Even ROAS calculator calculator: an example

Example values — Selling price: $50; Product cost: $30; Total ad spend: $200.

Step-by-step calculation:

1. Compute gross profit per unit: $50 − $30 = $20.
2. Per-sale ad allowance to break even = $20 (the gross profit per unit).
3. Calculate break-even ROAS: $50 ÷ $20 = 2.5. You need $2.50 revenue for every $1.00 ad spend to break even.

Frequently Asked Questions

What does ROAS measure?

ROAS (Return on Ad Spend) measures revenue generated for each dollar spent on advertising; higher ROAS means more revenue per ad dollar.

Does this formula include other costs like shipping or fees?

No. The formula uses product cost per unit; include shipping, marketplace fees, or other per-unit expenses by adding them to the product cost before calculating.

How do I use break-even ROAS with total ad spend?

Multiply your total ad spend by the break-even ROAS to estimate the revenue required to cover that ad spend without loss.

What if selling price equals product cost?

If selling price equals product cost, the denominator becomes zero and break-even ROAS is undefined; you cannot cover ad costs without increasing price or reducing costs.