ROAS and break-even calculator
Find the return on ad spend your ads need before they make you money. Enter your price and costs; add a management fee to see what it changes.
Made by the team behind our Google Ads management service.
How the numbers are worked out
- Profit per order: price minus cost of goods minus other costs.
- Margin: profit per order divided by price.
- Break-even ROAS: 1 divided by the margin. Below it, each ad dollar loses money.
- With the fee: break-even ROAS × (1 + fee ÷ ad spend). The fee is a cost the ads must also cover.
What the tool cannot tell you
It leaves out repeat orders. A buyer who orders again later is worth more than one sale, so a business with many repeat buyers can run ads a little below break-even on the first order.
A worked example
A store sells at $80. Goods cost $30 and shipping and fees $10, so each order makes $40 before ads: a margin of 50%. The ads break even at a ROAS of 2.00.
With $5,000 of ad spend a month and a $600 management fee, the ads must bring in $11,200 in sales, a ROAS of 2.24, before the month makes money.
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