Break-even ROAS calculator
Find the return on ad spend your orders need to cover their variable costs. Include shipping, packaging and payment fees, then set an optional target contribution margin after ads.
Calculate break-even ROASYour order economics
Enter USD amounts per order, using one product or a consistent average order mix. Defaults are fictional examples. No signup or store connection required.
Your advertising thresholds
Break-even ROAS
Calculating…
Revenue divided by advertising spend. A 2.50× ROAS means $2.50 revenue per $1 of ads.
| Non-ad variable costs per order | Calculating… |
|---|---|
| Contribution before ads per order | Calculating… |
| Contribution margin before ads | Calculating… |
| Maximum ad spend per order at break-even | Calculating… |
| Maximum ad spend per order at target margin | Calculating… |
| ROAS required for target margin | Calculating… |
ROAS is rounded up to two decimal places so the displayed threshold does not fall below the calculated requirement. Currency is rounded to cents. Fixed overhead, income tax and future repeat purchases are excluded.
Break-even ROAS formula
Contribution before ads = order revenue − non-ad variable costs. Break-even ROAS = order revenue ÷ contribution before ads, or 1 ÷ contribution margin expressed as a decimal. This requires positive contribution before ads.
Shopify’s break-even ROAS guide explains the relationship between margin and the advertising return needed. This tool explicitly deducts all the non-ad variable costs you enter, rather than relying on product cost alone.
- Maximum ad spend per order at break-even = contribution before ads.
- Desired contribution after ads = order revenue × target margin ÷ 100.
- Target ad allowance = contribution before ads − desired contribution after ads.
- Target ROAS = order revenue ÷ target ad allowance, when the allowance is positive.
Worked ecommerce example
A fictional order brings in $100 after discounts. Product costs are $40, shipping and fulfillment $8, packaging $2, payment fees $3, and other variable costs $7. Total non-ad costs are $60, leaving $40 contribution before ads.
Spending $40 on ads for that order leaves zero contribution after ads: break-even ROAS is $100 ÷ $40 = 2.50×. To retain a 10% contribution margin after ads, keep $10 from the order and limit advertising to $30. Required ROAS is $100 ÷ $30 = 3.333…×, displayed conservatively as 3.34×.
The remaining $10 still needs to help cover fixed overhead and tax. It is not net profit. These numbers demonstrate the calculation, not a universal target or typical Memberply result.
Use consistent revenue and cost inputs
Use revenue after discounts and exclude tax collected for a tax authority. If customer-paid shipping is included in revenue, include full shipping costs. If shipping income is excluded, use the shipping cost your store subsidizes. Count fulfillment and packaging only once.
Returns can change both revenue and costs. For a returns-adjusted analysis, use retained revenue and corresponding net costs for a mature order group, including unrecoverable shipping or handling. Do not subtract refunded revenue again as an additional cost. A blended average assumes the same product mix continues.
Use your actual payment costs. This tool does not assume a Shopify plan, country, card rate or gateway. Fixed app subscriptions and salaries are outside this per-order model unless a cost genuinely varies with the order and is included consistently.
Break-even ROAS is not business break-even
An order can cover its variable costs and ads while the store still loses money after rent, software, staff and other overhead. A store-wide break-even calculation needs fixed costs and sales volume. This calculator answers the narrower question of how much advertising an order can support.
A maximum advertising allowance per order is also different from customer acquisition cost. CAC includes costs beyond ads and counts new paying customers. Ad platforms may credit returning buyers or the same order to multiple campaigns. Compare only consistent revenue, costs, attribution and reporting windows.
Connect advertising costs with customer value
Start with the average order value calculator for an order baseline, then use the customer acquisition cost calculator for costs per new customer. The customer lifetime value calculator explores repeat-purchase contribution separately.
Discounts and shipping benefits can change the amount left for ads. Our membership discount calculator helps explore an offer’s margin impact. Memberply lets Shopify merchants configure membership benefits such as discounts, store credit and exclusive access. A benefit does not guarantee higher order values, lower acquisition costs or better advertising results.
Explore Memberply on ShopifyBreak-even ROAS questions
What is break-even ROAS?
Break-even return on ad spend is the revenue per advertising dollar needed to cover the variable order costs entered and the advertising spend. It leaves zero contribution after ads. It does not cover fixed overhead or establish that the whole business is profitable.
How do you calculate break-even ROAS?
Subtract non-ad variable costs from order revenue to find contribution before ads. Divide order revenue by that contribution. For $100 revenue and $60 in non-ad costs, contribution is $40 and break-even ROAS is 2.50×.
Which costs should I include?
Include product costs, shipping and fulfillment, packaging, payment fees and other variable costs for the same order or representative order group. Exclude ad spend because the calculator solves for the amount available for ads. Count each cost once.
How is target ROAS calculated?
Subtract the desired contribution after ads from contribution before ads to find the available ad spend. Divide order revenue by that allowance. The target margin is a percentage of revenue after variable costs and ads, before fixed overhead and tax.
What if costs equal or exceed revenue?
If costs equal revenue, there is no room for paid advertising at break-even. If costs exceed revenue, the order loses contribution even without ads. Neither case has a finite break-even ROAS that solves the problem.
Is maximum ad spend per order the same as CAC?
No. This calculator estimates an advertising allowance per order. Customer acquisition cost includes acquisition-related costs beyond ads and uses new paying customers as its denominator. Returning-customer orders and platform-attributed purchases are not interchangeable with new customers.
Can I compare this with Meta or Google Ads ROAS?
Only with a consistent revenue and attribution basis. Platforms may include taxes, shipping, unadjusted returns or overlapping attributed sales. Match the order group, time window and revenue definition, and do not assume attributed revenue proves incremental sales.