Free Breakeven ROAS Calculator
The shortcut everyone repeats is one divided by your margin, and it is wrong, because it forgets payment fees, shipping, and picking the order. Put your real costs in and see the number you actually need. Nothing you type ever leaves your browser.
Your unit economics
What you actually need
1 divided by margin says 1.67x
That is 0.62x lower than your real breakeven. Run at that number and you lose money on every order.
Where your order value goes
Free. No signup, no email. Nothing you type here leaves your browser.
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What this tool does
Ask the internet what ROAS you need to break even and you get one divided by your margin. A 60 percent margin means 1.67. It is a lovely rule and it has probably cost more small ecommerce businesses more money than any other number on the internet.
It is wrong because gross margin is not what is left. Out of that margin still comes the payment processor's cut, the shipping you swallowed to say free delivery, the person who picked the box, and the returns you knew were coming. On a $60 order at 60 percent margin with a 3 percent fee, $6 of shipping and $2 of fulfilment, what is actually left to spend on ads is $26.20, not $36.
So your real breakeven is 2.29, not 1.67. If you have been running at 2.0 and celebrating, you have been losing money on every order, and nothing in Ads Manager will ever tell you, because Meta does not know what your shipping costs.
This calculator does the version with the costs in it. It is free, there is no signup, and the whole thing runs in your browser.
How to work out your real breakeven ROAS
Two of these numbers you know cold. The other three are the ones people leave out, and they are the reason the shortcut fails.
- 1Use your real average order valueRevenue divided by orders over a proper period. Not the price of the product you wish everyone bought.
- 2Use gross margin, before everything elseWhat is left after the cost of the product itself and nothing more. If you are not sure, it is your selling price minus what you paid for the thing, over the selling price.
- 3Add the fees you forgetPayment processing is two to three percent almost everywhere, plus a fixed bit. Add your marketplace or platform cut if you have one. This is the line that is always missing.
- 4Add the shipping you eatIf you offer free delivery, you did not remove that cost, you moved it onto this line. It is often the single biggest thing standing between the shortcut and the truth.
- 5Add picking, packing, and returnsSomebody put the thing in a box. Some percentage comes back. Spread the annual cost across your orders and put the number in, even roughly. Rough and present beats precise and missing.
- 6Compare it to what you are actually gettingIf your reported ROAS is under the breakeven figure, you are buying revenue at a loss. That is a decision some businesses make deliberately for a first order. It should be a decision, not a surprise.
Why the one divided by margin shortcut is wrong
It is not slightly wrong. On thin margin businesses it is wrong in the direction that kills you.
- 1Gross margin is not cashMargin only accounts for the cost of the product. It says nothing about the processor's cut, the courier, or the person packing the box, and all three take their money before the ads do.
- 2Free shipping is not freeIt is the biggest single gap between the two numbers for most stores. You did not remove the cost when you stopped charging for it, you just stopped seeing it.
- 3The error is always in the same directionThe shortcut always tells you that you need a lower ROAS than you do. It never errs on the safe side. So you scale to it, the ROAS looks acceptable, and the bank balance quietly does not agree.
- 4Which is why the shortcut is printed on this pageThe calculator shows you what one divided by margin would have said, next to the real answer. The gap is usually uncomfortable, and the gap is the entire point of the tool.
What this number gets right, and what it leaves out
This is arithmetic on your own unit economics, so it is exactly as good as the numbers you put in.
What this counts
- The costs the shortcut ignoresFees, shipping, and fulfilment come out before the ads do. Counting them is the whole difference between this and every rule of thumb you have read.
- A CPA you can actually useBreakeven CPA is more useful day to day than ROAS, because it is a number you can put straight into a bid cap and compare to a campaign.
- Profit as a first class inputBreaking even is not a business. Set a target profit and the calculator tells you the ROAS that delivers it, rather than the one that survives.
- When there is no answerIf the unit loses money before advertising, it says so rather than printing an impressive infinity. No ROAS fixes an unprofitable product.
What it leaves out
- Repeat purchasesThis is the big one and it is the honest limit. This prices a single order. If a customer reliably comes back, buying the first order at a loss can be correct, and this page cannot tell you whether yours do.
- Whether your reported ROAS is realAds Manager reports attributed revenue on whatever window you set. Your real ROAS is total revenue over total spend, and it is usually worse.
- OverheadsRent, salaries, software, you. This is unit economics, not a profit and loss. Contribution pays for ads and everything else afterwards.
- Discounts and returns you did not modelA 20 percent off code changes AOV and margin at once. A 30 percent return rate in fashion changes everything. Put your real averages in, not your good month.
- Whether you can hit the numberThe calculator tells you what you need, not whether it is achievable in your auction. Sometimes the honest answer is that this product cannot be sold profitably on paid social.
- What your comment section is doing to the numberA scam reply under the ad does not change your breakeven, it changes whether you reach it. It shows up as a worse conversion rate with no explanation attached.
Knowing the number vs Sweep Inbox
One tells you the target. The other is about whether you hit it. Here is the split, plainly.
| This calculator | Sweep Inbox | |
|---|---|---|
| Price | Free, no signup | Paid, with a 7 day free trial |
| What it does | Tells you the ROAS you need | Removes one reason you are not hitting it |
| The lever | Your unit economics | What your buyers read under the ad |
| How it shows up | A target you compare against | A conversion rate that stops leaking for no visible reason |
| When it works | When you open it | Around the clock, seconds after each comment |
Questions people actually ask
- Work out what is left of an order after every cost except advertising: product cost, payment fees, shipping, and fulfilment. That leftover is your contribution, and it is also your breakeven CPA. Breakeven ROAS is your average order value divided by it. On a $60 order at 60 percent margin with 3 percent fees, $6 shipping, and $2 fulfilment, that is $26.20 left, so 60 divided by 26.20, which is 2.29.
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