Break-even ROAS calculator
The ROAS where ads start paying off
Enter your average order value and your contribution margin. You get the ROAS where a campaign stops losing money, the most you can pay to win one order, and the ROAS you need to keep a profit on top.
Enter your average order value and your contribution margin. You get the ROAS where a campaign stops losing money, the most you can pay to win one order, and the ROAS you need to keep a profit on top.
How the calculator works
If each sale leaves 40% of its value after goods, shipping and fees, every dollar of ad spend has to bring back $2.50 in sales just to break even: 1 divided by 0.40. Below that ROAS the campaign loses money on every order. The break-even cost per order says the same thing per sale. With a $60 order and a 40% margin, the most you can pay to win it is $24. Add the profit you want to keep and the calculator tells you the ROAS to aim for.
If each sale leaves 40% of its value after goods, shipping and fees, every dollar of ad spend has to bring back $2.50 in sales just to break even: 1 divided by 0.40. Below that ROAS the campaign loses money on every order. The break-even cost per order says the same thing per sale. With a $60 order and a 40% margin, the most you can pay to win it is $24. Add the profit you want to keep and the calculator tells you the ROAS to aim for.
If each sale leaves 40% of its value after goods, shipping and fees, every dollar of ad spend has to bring back $2.50 in sales just to break even: 1 divided by 0.40. Below that ROAS the campaign loses money on every order. The break-even cost per order says the same thing per sale. With a $60 order and a 40% margin, the most you can pay to win it is $24. Add the profit you want to keep and the calculator tells you the ROAS to aim for.