Break-Even ROAS Calculator
Work out the minimum ROAS your ads must hit to break even. Enter your gross profit margin to get the break-even ROAS and ACoS, then add a target profit margin to see the ROAS you need to stay in the black.
How to find your break-even ROAS
- Enter your gross profit margin, the percent of revenue left after product cost (COGS) and before ad spend.
- Read the break-even ROAS and break-even ACoS: spend more efficiently than these and your ads make money.
- Optionally add the net profit margin you want to keep after ads to see the target ROAS you should aim for.
Examples
40% margin product
Gross margin = 40%, target profit margin = 10%
Break-even ROAS = 2.5x, break-even ACoS = 40%, target ROAS = 3.33x
Frequently asked questions
How do I calculate break-even ROAS?
Break-even ROAS is 100 divided by your gross profit margin percent. At a 40% margin the break-even ROAS is 100 / 40 = 2.5, meaning you need $2.50 of revenue for every $1 of ad spend just to cover the ad. Below that, advertising loses money.
What is the difference between ROAS and ACoS?
ROAS (return on ad spend) is revenue divided by ad spend, shown as a multiple like 2.5x. ACoS (advertising cost of sale, common on Amazon) is ad spend divided by revenue, shown as a percent. They are inverses: ROAS = 1 / ACoS. A 2.5x ROAS is the same as a 40% ACoS, so break-even ACoS simply equals your gross margin.
How do I find the ROAS I need to hit a profit target?
Subtract the net profit margin you want to keep from your gross margin, then divide 100 by the result. With a 40% gross margin and a 10% target profit, you have 30% of revenue left to spend on ads, so the target ROAS is 100 / 30 = 3.33x.
Why does a higher margin mean a lower break-even ROAS?
A higher gross margin leaves more profit in every sale to cover the ad, so each dollar of ad spend needs to bring back less revenue. A 50% margin breaks even at 2x ROAS, while a 25% margin needs 4x. Thin-margin products demand much more efficient advertising.
Should I use gross margin or net margin for this?
Use your gross margin, which is revenue minus cost of goods sold, before advertising. Break-even ROAS tells you the point where ad-driven gross profit exactly covers the ad spend. Fold shipping, fees and returns into your margin first for a more honest number.
Is my data sent anywhere?
No. The calculation runs entirely in your browser. Nothing you enter is uploaded, logged or stored.
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