Free tool
ROAS calculator with your break even line
ROAS is revenue from ads divided by ad spend. Your break even ROAS is 1 divided by your margin before ads, so a 40% margin breaks even at 2.5. Below that line, every sale loses money.
Your ROAS
3.20x
Break even
2.50x
You are above the line. Every $1 of ads comes back as $3.20 and leaves $0.28 after costs and the ad itself.
- Left after ads
- $1,400
- Highest ad cost per order
- $32.00
- ROAS to keep 10%
- 3.33x
Break even ROAS by margin
The lower your margin, the harder your ads have to work. Find your margin here.
| Margin before ads | Break even ROAS |
|---|---|
| 70% | 1.43x |
| 60% | 1.67x |
| 50% | 2.00x |
| 40% | 2.50x |
| 30% | 3.33x |
| 25% | 4.00x |
| 20% | 5.00x |
ROAS, MER and ROI are three different questions
- ROAS
- Did this campaign pay?Revenue from the ads divided by what the ads cost.
- MER
- Is all my marketing paying?All store revenue divided by all ad spend. Platforms can't double count it.
- ROI
- Did I make money?Profit divided by what you spent. It counts your costs, so it can be negative at a ROAS of 3.
Three ways to move the line
- Raise your margin
- At 40% you break even at 2.5. At 50% you break even at 2. A better margin helps every campaign at once.
- Raise your order value
- Bundles and free shipping thresholds lift order value. The same ad cost then sits on a bigger sale.
- Fix the page, not only the ad
- A higher conversion rate means more sales from the same clicks, so ROAS rises with no change to the ads.
How the sums work
Four small sums. Nothing is stored, and the numbers never leave your browser.
- ROAS
- Revenue from ads divided by ad spend. $16,000 from $5,000 of ads is a ROAS of 3.2.
- Break even ROAS
- 1 divided by your margin before ads. At a 40% margin that is 2.5. At 25% it is 4.
- Profit after ads
- Revenue times margin, minus ad spend. $16,000 at 40% is $6,400, minus $5,000 leaves $1,400.
- Highest cost per order
- Average order value times margin. At $80 and 40%, an order can cost $32 in ads before you lose money.
ROAS questions, answered
What is a good ROAS?
There is no single good number. A good ROAS is one above your own break even line. A store with a 60% margin makes money at 2, and a store with a 25% margin loses money at 3.5.
How do I calculate break even ROAS?
Divide 1 by your margin before ads. A 40% margin gives 1 divided by 0.4, which is 2.5.
What is the difference between ROAS and ROI?
ROAS compares revenue with ad spend and ignores your other costs. ROI compares profit with what you spent. That is why a ROAS of 3 can still lose money.
Should I use the ROAS my ad platform shows?
Use it to compare campaigns, not to judge the business. Ad platforms count sales in their own way, and two platforms can claim the same order. Your total revenue divided by your total ad spend is a useful check.
Does this count repeat orders?
No. It looks at the sales you enter. If customers buy again, a first order can sit under the line and still pay off later, so judge that with your repeat rate.
Want the whole store read?
The Shopify Growth Diagnostic reads your store, your numbers and your search traffic, and tells you what to fix first. $997, fixed price, 5 days.