Break-even ROAS is the net selling price divided by the contribution margin per order (price minus product cost, shipping and fees). A product that sells for €60.50 including BTW, with €20 product cost, €5 shipping and 3% fees, has a €23.50 contribution on a €50 net price, so break-even ROAS is 2.13 and the most you can pay to acquire a customer is €23.50.
How to calculate break-even ROAS
Break-even ROAS tells you the minimum return on ad spend at which a campaign stops losing money. The formula: break-even ROAS = net price ÷ (net price − variable costs). Variable costs here are the product cost, shipping and packaging, and payment or platform fees. If a product nets €50 and leaves €23.50 after those costs (a 47% contribution margin), you can spend up to €23.50 on ads per order before losing money. The corresponding ROAS is 50 ÷ 23.50 = 2.13. Below 2.13 each sale costs you money, above it you make a contribution toward your fixed costs and profit.
Worked example
| Item | Amount |
|---|---|
| Selling price incl. 21% BTW | €60.50 |
| Net price (÷ 1.21) | €50.00 |
| Product cost | −€20.00 |
| Shipping and packaging | −€5.00 |
| Payment fee 3% of net price | −€1.50 |
| Contribution per order | €23.50 |
| Break-even ROAS | 50 ÷ 23.50 = 2.13 |
Target ROAS for a profit goal
Breaking even is not the goal. If you want a 10% profit on each order after ads, subtract 10% of the net price (€5) from the contribution and recalculate: 50 ÷ (23.50 − 5) = 2.70. That is your target ROAS. Ad managers can use this as the target in automated bidding, and you can use the maximum CPA as a cap on cost per order.
Things that change the result
- Returns. If 10% of orders come back, effective revenue falls. Reduce your net price accordingly or add returns to costs.
- Repeat purchases. If customers buy again, you can accept a ROAS below break-even on the first order, as long as lifetime value covers it.
- BTW. Always use prices excluding BTW. The BTW calculator does that conversion.
- Fixed costs. Break-even ROAS ignores salaries and tools, so aim well above it.
Once your campaign runs, measure the real result with the ROAS calculator. If your sales form freelance income, see the tax effect in the ZZP calculator. And for the effect of small percentage changes on profit, use the percentage calculator.
How to use this calculator
- Enter the selling price and tick the box if it includes 21% BTW.
- Add product cost, shipping and handling per order, and percentage fees.
- Set a profit target as a percentage of the net price.
- Read the break-even ROAS, the maximum cost per order and the target ROAS.
Key figures at a glance
| Break-even ROAS | net price ÷ contribution |
|---|---|
| Max CPA | = contribution per order |
| Target ROAS | net price ÷ (contribution − target profit) |
| BTW | Use prices excl. 21% |
Frequently asked questions
The ROAS at which ad revenue exactly covers product and variable costs plus the ad spend, so profit is zero.
It equals the contribution margin per order: net price minus product cost, shipping and fees.
They are inverses. ACOS at break-even is 1 divided by break-even ROAS.
No, the standard break-even ROAS only uses variable costs, but you should aim above it to cover fixed costs.
Because it also leaves room for the profit margin you want after ad costs.