Platform ROAS is not profit. A campaign can report 3× ROAS and still lose money once COGS, platform and payment fees, shipping subsidies, returns, and fixed overhead consume the margin. This calculator finds your true ROAS floor — marginal and business-level — plus the target ROAS for a desired net margin, your max CAC (first-order and LTV-adjusted), break-even MER, and the maximum ad budget your P&L can carry. Built for ecommerce, DTC, marketplace sellers, agencies, and small-business advertisers.
Educational estimate only — not accounting, tax, legal, investment, or financial advice. Ad platforms may over- or under-attribute revenue.
Break-even ROAS = 1 ÷ effective contribution margin. A product with a 50% gross margin, 3% fees, a 7% shipping subsidy, and a 5% return rate keeps (50 − 3 − 7) × (1 − 0.05) = 38% of attributed revenue — so its break-even ROAS is 1 ÷ 0.38 ≈ 2.63×. A 3× campaign on it earns $350 per $2,500 of spend; the same 3× on a 15.6%-margin product loses money. Fixed overhead raises the business-level floor further.
Calculator
Simple ROAS Floor
%
Revenue left after product cost, before fees and shipping.
%
%
Share of revenue you absorb as shipping cost.
%
$
$
What your ad platform attributes to this spend.
Your inputs auto-save in this browser. The share link encodes them in the URL — nothing is sent to a server.
Attributed revenue ÷ ad spend — 14% above the floor.
Profit / loss after ads
$350
Attributed revenue × effective margin − ad spend.
Effective contribution margin
38%
40% before returns.
Max CAC as % of revenue
38%
You can spend at most this share of attributed revenue on acquisition.
Safety buffer
0.37×
Actual ROAS − break-even ROAS.
Estimate only — not accounting, tax, legal, investment, or financial advice. Platform ROAS may over- or under-attribute revenue.
10 sheets generated from your inputs with live formulas: simple floor, full P&L ROAS, AOV/CAC model, a 20-row SKU comparison, scenarios, sensitivity tables, and a charts dashboard.
What's driving the result
Plain-English reading of the current inputs — planning signals, not verdicts.
Biggest drag on your ROAS floor
Shipping subsidy takes 7.0 points of revenue — threshold offers or partial charges win some of it back.
ROAS zones
Below 2.63× ads lose money. The marker shows your actual ROAS.
0×break-even 2.63×4.2×
Red = loss-making zone · green = profitable. Your actual ROAS is 3×.
Break-even ROAS sensitivity
Gross margin (rows) × return rate (columns), at your current 3% fees and 7% shipping subsidy. Greener = a lower, easier floor.
Break-even ROAS by gross margin and return rate
Margin ↓ / Returns →
0%
5%
10%
15%
20%
20%
10
10.53
11.11
11.76
12.5
30%
5
5.26
5.56
5.88
6.25
40%
3.33
3.51
3.7
3.92
4.17
50%
2.5
2.63
2.78
2.94
3.13
60%
2
2.11
2.22
2.35
2.5
70%
1.67
1.75
1.85
1.96
2.08
— means the effective margin is zero or negative at that combination, so no ROAS can break even. The workbook adds fee-vs-shipping, AOV-vs-CAC, and target-margin grids.
Break-even ROAS is the return on ad spend at which an ad-driven sale exactly covers its own costs — the floor below which every attributed sale loses money. It equals 1 ÷ your effective contribution margin: at a 38% margin after fees, shipping, and returns, break-even ROAS ≈ 2.63×.
What is a good ROAS for ecommerce?
There is no universal number — it depends entirely on your margin structure. A 3× ROAS is comfortably profitable at a 51.7% effective margin (floor ≈ 1.93×) but loses money at a 15.6% margin (floor ≈ 6.39×). “Good” means comfortably above your own break-even ROAS, not a benchmark.
What is the difference between ROAS and MER?
ROAS measures one campaign or channel: attributed revenue ÷ its ad spend. MER is blended and attribution-free — this page uses total ad spend ÷ total revenue, where lower is better. ROAS guides per-campaign bids; MER tells you whether the whole business can afford its marketing.
Why can a high ROAS still lose money?
Because platform ROAS counts revenue, not margin. A 3× ROAS returns $3 of revenue per $1 of ads, but if only 16 cents of each revenue dollar survives COGS, fees, shipping, and returns, that $3 contributes just $0.47 against $1 of spend. Fixed overhead raises the bar further.
What this calculator does
It answers the questions that decide whether paid acquisition is actually working: What is my marginal break-even ROAS? What is the true business-level floor after fixed overhead? What target ROAS hits my desired net margin? What is my max CAC per order — and LTV-adjusted? What is my max ad spend as a share of revenue (break-even MER)? Is my actual ROAS profitable, risky, or loss-making? How do returns, fees, discounts, and shipping change the answer? And which SKUs or channels can support aggressive spend?
Four modes share the same transparent identities: Simple ROAS Floor when you only know your margin; Full P&L ROAS for the monthly business-level answer with overhead, paid revenue share, MER, and max budgets; AOV / CAC for per-order acquisition economics with an LTV window; and SKU / Channel to compare up to five lines (twenty in the workbook) with recommended actions.
Every output explains itself: the verdict says where you stand, the diagnosis names the input hurting profitability most, and the formula section shows the exact arithmetic — the same arithmetic the downloadable workbook reproduces as live Excel formulas.
Simple vs full P&L break-even ROAS
The simple (marginal) floor asks: does one more ad-driven sale pay for itself? It needs only the effective contribution margin — gross margin minus fees and shipping, scaled by returns. It is the right lens for campaign-level bid decisions, and it is the model the previous version of this page offered.
The business-level floor asks the harder question: does the month make money? Fixed overhead claims its share of margin before ads can, and only the paid share of revenue answers to ROAS at all. The full P&L mode computes the available ad margin (return-adjusted margin − overhead rate), turns it into a break-even ROAS, a break-even MER, and a hard monthly budget ceiling — and then reserves your target net margin to produce the target versions of all three.
The gap between the two floors is where most ad-spend mistakes live: campaigns that clear the marginal floor but not the business-level one feel profitable while the P&L bleeds. The diagnosis card calls this out explicitly when it happens.
The share of attributed revenue that can pay for ads. SKU/Channel rows also subtract a fulfilment % inside the bracket; the AOV/CAC mode instead subtracts a fixed fulfilment cost per order after applying the ECM.
Break-even ROAS (marginal)
BE ROAS = 1 ÷ ECM
Below it, every attributed sale loses money.
Actual ROAS
Actual = Attributed revenue ÷ Ad spend
As reported by the platform — treat as an estimate.
Business-level break-even ROAS = 0.60 ÷ 0.3032 ≈ 1.98×; target ROAS ≈ 2.95×. Max ad budget: $30,320 at break-even, $20,320 at target profit. Break-even MER 30.3% vs current MER 15%.
At the current $15,000 spend with $45,000 attributed (3.0×), the month nets $15,320 after ads — beating the 10% target by $5,320, with the under-spend check suggesting room to test bigger budgets.
Example 3 — why “3× ROAS” means nothing without margin
Premium skincare: 70% margin − 3% fees − 8% fulfilment − 4% shipping, 6% returns → ECM 51.7%, floor ≈ 1.93×. At 3× on $6,000 spend it earns ≈ +$3,306.
Phone accessories: 35% margin − 3% − 10% − 5%, 8% returns → ECM 15.6%, floor ≈ 6.39×. The same 3× on $4,000 spend loses ≈ −$2,123.
Identical ROAS, opposite outcomes — load these as the sample rows in SKU/Channel mode to see the verdicts side by side.
Reading the margin waterfall
The waterfall in Full P&L mode walks one month of revenue down to profit: revenue → COGS → fulfilment → payment and platform fees → discounts → shipping subsidy → other variable costs → returns → the contribution available before ads → fixed overhead → ad spend → net profit. Each bar is a share of revenue you no longer get to spend on growth.
Two readings matter. First, the “contribution before ads” bar is your break-even MER (see ROAS vs MER) — marketing above it guarantees a loss. Second, the biggest cost bars are your highest-leverage fixes: a 2-point COGS negotiation often does more for the ROAS floor than weeks of campaign optimisation.
ROAS vs MER
ROAS is a campaign metric: attributed revenue divided by that campaign’s spend. It is actionable for bids but inherits every attribution problem — platforms can claim organic sales or miss assisted ones, and two channels can both claim the same order.
MER (marketing efficiency ratio) is the blended sanity check: it needs no attribution, so it cannot be gamed by window settings. This page uses the spend-share form — ad spend ÷ total revenue, where lower is better — because it compares directly against margin; many DTC dashboards report the reciprocal (revenue ÷ spend, a multiple where higher is better), so convert before comparing. The calculator computes your break-even MER — the maximum blended share of revenue ads can take — directly from the margin structure. When platform ROAS looks great but MER creeps past its break-even level, believe the MER.
Use them together: ROAS to steer individual campaigns, MER to cap the total budget. The “possible under-spend” diagnostic fires when the month is profitable and current MER sits far below the break-even MER — the opposite failure mode that pure ROAS-watching misses.
Break-even ROAS vs target ROAS
Break-even ROAS keeps you at zero — useful as a floor, useless as a goal. The target ROAS reserves your desired net margin first: target available margin = return-adjusted margin − overhead rate − target margin, and target ROAS = paid share ÷ that remainder. The gap between floor and target is your real operating corridor.
In the worked example the corridor runs from 1.98× to 2.95×: campaigns between those levels grow revenue while diluting the profit goal; campaigns above 2.95× compound it. Feeding the floor (not the target) into platform tROAS bidding and then wondering where the profit went is one of the most common ecommerce mistakes this page is built to prevent.
AOV, CAC, and LTV-adjusted ROAS
Per-order thinking converts the same identities into acquisition language: the first-order contribution (AOV × effective margin − fulfilment) is the most you can pay for a customer without losing money on day one. Reserve a target profit and you get the target CAC; divide AOV by either figure and you get the equivalent ROAS targets.
LTV adjustment adds the repeat layer: expected repeat contribution = repeat AOV × repeat margin × repeat rate, within the window you choose (30 days to 1 year, or first-order only to switch it off). That raises the max CAC — legitimately, if your cohort data supports the repeat rate. The calculator labels the dangerous middle zone explicitly: a CAC above first-order contribution but below the LTV-adjusted maximum is “first-order loss, LTV-dependent acquisition” — a bet on future behaviour that ties up cash until repeats arrive.
Common mistakes
Treating platform ROAS as profit
Ad dashboards report attributed revenue per ad dollar — before COGS, fees, shipping, returns, and overhead. A campaign can “win” on ROAS and lose money in your P&L. Always compare against YOUR break-even ROAS.
Using gross margin instead of effective margin
Fees, shipping subsidies, and returns all come out before ads can be paid for. A 50% gross margin is often a 38% effective margin — that difference moves the ROAS floor from 2.0× to 2.63×.
Ignoring fixed overhead
Marginal ROAS can look profitable while the business loses money — overhead claims its share of margin first. Full P&L mode computes the higher business-level floor. See simple vs full P&L.
Setting one ROAS target for every product
Break-even ROAS is a property of each product’s margin structure. The SKU/channel mode shows how the same 3× ROAS can mean “scale” for one product and “stop” for another.
Confusing MER targets with ROAS targets
MER divides by total revenue; ROAS by attributed revenue. Mix them up and budgets look safer or scarier than they are — the calculator reports both, each with its own break-even level. See ROAS vs MER.
Justifying CAC with unverified LTV
LTV-adjusted CAC is only as good as the repeat-rate assumption behind it. If first orders lose money, cash is tied up until repeats arrive — verify cohort repeat rates and watch the payback window before scaling.
Trusting attribution windows blindly
Platforms can claim organic sales (over-attribution) or miss view-through effects (under-attribution). Cross-check attributed revenue against your store analytics and blended MER before believing a ROAS figure.
Scaling on average instead of marginal ROAS
The last dollar of spend usually buys less than the first. When average ROAS sits far above break-even, scale in increments and watch what the MARGINAL spend returns — not the account-wide average.
Assumptions
Percentages (margin, fees, shipping, returns, discounts) are shares of revenue and are assumed to hold across the volume range analysed.
Returns scale the contribution margin multiplicatively — a returned order is treated as losing its full contribution.
The full P&L model treats fixed overhead as constant for the month and spreads it against total revenue; only the paid-attributed share of revenue answers to ROAS.
The scenario ROAS tweak moves attributed revenue at constant spend; real-world scaling usually changes efficiency too.
The four modes are independent models that share identities, not one merged dataset — each uses its own inputs, exactly as exported to the workbook.
Limitations
This is an educational planning estimate, not bookkeeping — it does not replace your P&L, accounting records, or professional advice.
Platform-reported ROAS may over- or under-attribute revenue (attribution windows, view-through conversions, channel overlap) and usually excludes returns, refunds, fees, taxes, shipping, and chargebacks.
Fixed overhead, fee schedules, and return rates drift over time — refresh the inputs from real statements (Shopify, Amazon, Meta, Google Ads, Stripe, your processor).
LTV assumptions are uncertain by nature; treat LTV-justified CAC as a hypothesis to verify with cohort data, and watch the cash-payback window.
No universal “good ROAS” exists — every verdict here is relative to YOUR margin structure, never an industry benchmark.
How do I get my real fee %, shipping subsidy, and return rate from a Shopify, Amazon, or Stripe payout statement?
Read them from real statements, not estimates. Fee % is total processing and marketplace fees ÷ revenue (Stripe, Shopify Payments, Amazon referral/FBA); shipping subsidy is the shipping cost you absorb ÷ revenue; return rate is refunded orders ÷ orders for the same period.
Does this work for subscription, replenishment, or bundle products?
Yes. Use AOV / CAC mode and set the repeat-purchase layer — repeat rate, repeat AOV, repeat margin, and an LTV window (30 days to 1 year). For bundles, enter the blended AOV and margin. The LTV-adjusted max CAC then reflects the lifetime value those customers earn.
Why is my business-level break-even ROAS higher than the target my agency set?
Agencies usually quote a marginal or platform ROAS that ignores fixed overhead. Full P&L mode subtracts overhead from your return-adjusted margin first, so the business-level floor is higher — 1.98× in the worked example — than the lower marginal floor a platform reports. The business-level figure is the one your P&L actually feels.
Should I feed break-even ROAS or target ROAS into Google or Meta tROAS bidding?
Feed the target ROAS, not the floor. The floor only keeps you at zero; the target reserves your desired net margin first (the worked example’s corridor runs 1.98× to 2.95×). Bidding to the floor and then wondering where the profit went is a classic ecommerce mistake.
How do I handle multiple channels that each claim the same sale?
That double-counting comes from overlapping attribution windows, inflating per-channel ROAS. Cross-check against blended MER (ad spend ÷ total revenue), which needs no attribution and can’t be gamed by window settings. Use SKU / Channel mode for per-channel floors and MER to cap total spend.
My effective margin is negative — what does the “—” in the sensitivity table mean?
It means the effective contribution margin at that combination is zero or negative, so no ROAS can ever break even — costs exceed revenue before any ad spend. Fix the economics (cut COGS, fees, shipping, or returns, or raise price) before scaling; no bidding strategy rescues a negative margin.
How often should I re-run this and refresh my inputs?
Whenever the inputs drift — fee schedules, return rates, and overhead all change. A monthly re-run against your latest Shopify, Amazon, Meta, Google Ads, and Stripe statements keeps the floor honest, plus a check after any price change, supplier renegotiation, or shift in paid-revenue mix.
Can I use this for lead-gen or app-install campaigns with no AOV?
It’s built for revenue-per-order economics, so it fits best when a conversion has an order value and a margin. For lead-gen or installs, substitute the average value (and margin) of a converted lead for AOV in AOV / CAC mode; your max CAC becomes the most you can pay per lead.
Does the downloadable workbook match the on-page numbers exactly?
Yes. The 10-sheet workbook reproduces the same identities as live, editable Excel formulas, validated cell-by-cell against this page’s engine, so every figure ties out. It also extends the model with a 20-row SKU comparison and extra sensitivity grids you can edit directly.
Is any data sent anywhere when I use the share link or download the workbook?
No. Inputs auto-save only in this browser’s local storage, the share link encodes them in the URL, and the workbook is generated in your browser — nothing reaches a server. Anyone you send the link to can see those inputs, so avoid sharing sensitive figures publicly.
How do you calculate break-even ROAS?
Take your gross margin, subtract platform and payment fees and any shipping subsidy, then multiply by (1 − return rate) to get your effective contribution margin. Divide 1 by it. Example: (50% − 3% − 7%) × (1 − 5%) = 38%, so break-even ROAS = 1 ÷ 0.38 ≈ 2.63×.
Related calculators
This page answers “what ROAS do my ads need?” — these tools take the neighbouring questions:
Ecommerce Profit CalculatorAn ecommerce operator’s profitability dashboard — net profit per order after product costs, platform and payment fees, shipping, ads, and returns, with break-even price and ROAS, max affordable CAC, fixed-cost break-even, channel and SKU comparison, a scenario planner, and a 12-sheet Excel workbook.
Profit Margin CalculatorA full profitability cockpit — gross, contribution, operating, and net margin across simple, advanced, ecommerce, service, SaaS, and solve-for modes, with target pricing, discount impact, break-even, scenarios, SKU comparison, and a 17-sheet Excel workbook.
Markup CalculatorPrice from cost across 9 modes — markup, target margin, price analysis, profit target, reverse cost ceilings, ecommerce landed cost after fees, discount impact, quantity profit, and batch comparison, with a 10-sheet Excel pricing workbook.
Break-Even CalculatorA full break-even planner — units and revenue break-even, contribution margin, target profit, margin of safety, and a viability verdict across simple, detailed, service, ecommerce, multi-product, and solve-for modes, with scenarios, sensitivity tables, a break-even chart, and a 12-sheet Excel workbook.
LTV:CAC CalculatorFull unit-economics tool for SaaS, ecommerce, and subscription businesses: CAC, gross-profit and discounted LTV, the LTV:CAC ratio, CAC payback, sustainable CAC ceilings, channel-by-channel decisions, scenarios, sensitivity — plus a 13-sheet Excel workbook.
ROI CalculatorReturn on investment five ways — simple ROI, date-based ROI, net ROI after fees/taxes/income, a reverse target solver, and a two-investment comparison — with gain/loss, annualised ROI (CAGR), and a multi-sheet Excel report.
Sources & methodology
The calculator applies standard contribution-margin and break-even arithmetic to ad-spend decisions: effective margin = (gross margin − fees − shipping) × (1 − returns); break-even ROAS = 1 ÷ effective margin; the business-level model subtracts the fixed-overhead rate from the return-adjusted margin and divides the paid revenue share by what remains; per-order figures translate the same constraint into CAC terms, with an optional repeat-purchase layer. The exported workbook reproduces the identical formulas as live, editable Excel formulas, validated cell-by-cell against this page's engine. No ROAS benchmark on this page is presented as an industry standard — every threshold is derived from the margins you enter. Calculator Matters is an independent project, not affiliated with any platform or source listed. Links open in a new tab.
Last reviewed: 14 June 2026. Formula and assumptions reviewed for accuracy. First published 12 June 2026.
Advertising & business planning disclaimer
This break-even ROAS calculator and its XLSX workbook are for educational estimation only. They model ad profitability from the margins, fees, return rates, overhead, and attribution figures you enter; ad platforms may over- or under-attribute revenue, and platform-reported ROAS usually excludes returns, refunds, fees, taxes, shipping, chargebacks, and fixed overhead. LTV assumptions are uncertain. This is not accounting, tax, legal, investment, or financial advice — verify costs against your accounting records and platform statements (Shopify, Amazon, Meta, Google Ads, Stripe, your payment processor) before making spending decisions.
Built and maintained by Calculator Matters, an independent calculator project. Formulas reviewed against the published sources above · Last reviewed 14 June 2026 · How we calculate · Found an error? [email protected]
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