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Determine the exact Return On Ad Spend (ROAS) you need to be profitable. Our free calculator uses your product price and cost of goods to find your break-even point, helping you set realistic goals for your ad campaigns.
Break-Even ROAS is the point at which your revenue from advertising exactly covers both the cost of the ads and the cost of the products sold. It's the minimum ROAS you need to achieve to not lose money on your ad campaigns. Any ROAS above this number is profit.
It's simple. Enter two key figures: - Product Selling Price: The final price a customer pays for your product. - Cost of Goods Sold (COGS): The total cost for you to acquire or produce one unit of that product. The calculator will then instantly show your required Break-Even ROAS.
For the most accurate calculation, your COGS should include all costs directly associated with getting one product to the customer. This typically includes the manufacturing/purchase cost, shipping fees, packaging, and any transaction fees (like Stripe or Shopify Payments fees).
A Break-Even ROAS of 2.5x means that for every $1 you spend on advertising, you must generate $2.50 in revenue just to cover your costs and break even. To make a profit, your actual ROAS must be higher than 2.5x.
To get a higher ROAS, you need to increase the revenue generated from the same ad spend. You can do this by: - Increasing your Conversion Rate: Optimize your landing pages and ads to convert more visitors into customers. - Increasing your Average Order Value (AOV): Encourage customers to buy more through bundles, upsells, or free shipping thresholds. - Decreasing your COGS: Find ways to lower your product or shipping costs to improve your profit margin on each sale.
