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ROAS calculator

Ad spend and revenue in. Your ROAS and the break-even ROAS your margin allows out.

What's left of each sale after product, shipping and fees, before ad spend.

ROAS4.00x
ROAS as a percentage400%
Break-even ROAS at 40.0% margin2.50x
Headroom above break-even1.50x
Profit after ads, at your margin$300.00

Above break-even by 1.50x. Every point over 2.50x is profit at a 40.0% margin.

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1

Enter ad spend and the revenue it generated

For a campaign, a product, or a whole account over the same period.

2

Enter your contribution margin

What's left from each sale after product cost, shipping, and fees, everything except the ad spend itself.

3

Read your ROAS and your break-even ROAS

See if you're actually above the line your margin requires, not just above 1x.

The ROAS formula

ROAS = revenue ÷ ad spend. Spend $500, generate $2,000 in revenue, ROAS is 4, often written 4x or 400%. It's the most quoted number in paid ads, and the most misleading one on its own, because it says nothing about whether you actually made money.

Break-even ROAS: the number that actually matters

Break-even ROAS = 1 ÷ contribution margin, expressed as a decimal. If a sale carries a 40% contribution margin (0.4) after product cost, shipping and payment fees but before the ad spend, break-even ROAS = 1 ÷ 0.4 = 2.5x. Below 2.5x on that product, ad spend loses money even though ROAS is above 1. Above it, every extra point of ROAS is profit.

This is why a "good ROAS" is different for every store. A 30% margin business needs at least 3.3x just to break even; a 60% margin business breaks even at 1.67x and can profitably spend at ROAS levels that would sink the first business. Always check your ROAS against your own break-even number, not a rule of thumb you saw online.

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Frequently asked questions

What is ROAS?
Return on ad spend: revenue generated divided by the amount spent on ads. A ROAS of 4 means $4 in revenue for every $1 spent.
What is a good ROAS?
It depends entirely on your margin. There's no universal good number, a ROAS that's profitable for a 60% margin product can lose money for a 20% margin one. Compare your ROAS to your own break-even ROAS.
How do I calculate break-even ROAS?
Break-even ROAS = 1 ÷ contribution margin (as a decimal). A 25% margin means break-even ROAS = 1 ÷ 0.25 = 4x.
Does ROAS account for product cost and fees?
No, raw ROAS only compares revenue to ad spend. It ignores product cost, shipping and payment fees entirely, which is why a high ROAS can still be an unprofitable sale.
What is the difference between ROAS and ROI?
ROAS is revenue over ad spend. ROI is profit over total cost, including everything, not just the ad. ROAS above 1 can still mean an ROI below zero.
How do I raise my ROAS?
Lower cost per acquisition through better targeting or creative, raise average order value, or raise price without losing conversion. Any of the three moves revenue up relative to spend.
Should I pause a campaign below break-even ROAS?
Usually, unless you're deliberately spending to acquire customers you expect to buy again, in which case check ROAS against lifetime margin, not first-order margin alone.
What contribution margin should I use for this calculator?
Price minus every cost that scales with the order except the ad spend itself: product cost, shipping, packaging and payment processing fees. The profit margin calculator can help you find that number first.

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