Use this break even ROAS calculator to determine the minimum return on ad spend required to run profitable ads for your Shopify store.
Break-Even ROAS Calculator
Enter your numbers below to calculate your break-even ROAS.
Break-Even ROAS Calculator
Insight
Your break-even ROAS is 2.4
This means your ads must generate $2.40 for every $1 spent.
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How to Use the Calculator
How to Calculate Your Break-Even ROAS
- Enter your product selling price
- Add your cost of goods and shipping
- Add your cost of goods and shipping
- Include payment processing fees
- Estimate your refund rate
- The calculator shows the ROAS required to break even
If your campaigns run below this ROAS, your ads are losing money.
Example Calculation
Example
Product Price: $100
COGS: $30
Shipping: $5
Processing Fee: 3%
Refund Rate: 10%
Contribution Margin = $52
Break-Even ROAS = 1.92
This means your ads must generate at least 1.92 ROAS to avoid losing money.
Break-Even ROAS Calculator FAQ
What is break-even ROAS?
Break-even ROAS is the minimum return on ad spend required to cover all variable costs without losing money. If your campaign ROAS drops below this number, your ads are not profitable.
How do you calculate break-even ROAS?
Break-even ROAS is calculated using the formula:
Break-Even ROAS = Selling Price ÷ Contribution Margin
Contribution margin includes product cost, shipping, payment processing fees, refunds, and discounts.
Why is ROAS alone misleading?
ROAS only measures revenue compared to ad spend. It does not account for costs such as refunds, shipping, and processing fees. Because of this, a campaign with a good ROAS may still be unprofitable
What is a good ROAS for Shopify brands?
A good ROAS depends on your costs. Many Shopify brands aim for a ROAS that is 20–30% above their break-even ROAS to maintain safe profit margins.
Who should use this calculator?
Who should use this calculator?
Shopify store owners
DTC brands running paid ads
Ecommerce marketers managing advertising budgets1
It helps determine whether ad campaigns are profitable.