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Break-Even ROAS & Ad Spend Calculator

Calculate your exact break-even ROAS and maximum allowable CPA across Meta, TikTok, and Google Ads before spending a dollar on ad campaigns.

$
Unit Manufacturing Cost (COGS)Product sourcing / supplier invoice
Shipping & PackagingFulfillment, 3PL, and box costs
Platform & Operating Deductions
Platform & Payment CutShopify / Stripe / Amazon total %
%
Refund & Return RateAllowance for returns and chargebacks
%
Target Net Profit MarginTarget net profit after all ads
%
Unit Revenue AllocationGross margin: 56.6%
Max Ad CPA COGS Shipping Fees/Loss
BREAK-EVEN ROAS
1.77x
Ads below this ROAS lose money
MAX ALLOWABLE CPA
$36.80
Max ad spend per purchase to break even
TARGET ROAS (18%)
2.59x
Target CPA: $25.10 (Nets $11.70/unit)
ROAS Performance Ladder & Ad Scaling Scenarios
Unit margin & profit at various campaign ROAS tiers
Ad ROASAcquisition CPANet Profit / UnitNet Margin %Outcome
1.33x$48.96$-12.16-18.7%Unprofitable
1.77x$36.72+$0.080.1%Profitable
2.18x$29.82+$6.9810.7%Profitable
2.59x$25.10+$11.7018.0%Target Hit
3.50x$18.59+$18.2128.0%High Profit
Reference

ROAS & CPA Formulas Explained

Key metrics for e-commerce media buyers and store owners.

FormulaBreak-Even Return on Ad Spend (ROAS)
Break-Even ROAS = Retail Price / (Retail Price - COGS - Shipping - Platform Fees - Return Allowance)

Why ROAS > 1.0 is often unprofitable: A ROAS of 1.0 means your ad spend equals your revenue. Because you still have product costs, shipping, and credit card processing fees, breaking even typically requires a ROAS between 1.8x and 3.5x depending on your product margins.

What is the difference between ROAS and ROI?

ROAS (Return on Ad Spend) measures gross revenue generated divided by direct advertising spend (e.g. $500 revenue / $100 ad spend = 5.0x ROAS). It does not account for product cost, shipping, or overhead.

ROI (Return on Investment) measures net profit after all expenses divided by total cost. A high ROAS does not guarantee positive ROI if product margins are razor-thin.

How should I set my Max Allowable CPA in Meta or TikTok Ads?

Your Max Allowable CPA is identical to your unit Gross Contribution Margin. If your product sells for $60 and costs $25 to make, ship, and process, your max CPA is $35. Any conversion cost below $35 generates positive cash flow.