∑
DevFormula
SaaS Unit Economics & GrowthVerified 2026-10-21

E-Commerce Break-Even ROAS Calculator

Simulate minimum ROAS and target CPA required to profitably run paid ads across Google, Meta, and TikTok.

Parameters & Config

$
$
10$5,000,000$

Total paid media budget allocated across advertising channels

$
$
10$10,000,000$

Total gross revenue attributed to the advertising campaign

%
%
0%95%

Cost percentage to manufacture, source, or fulfill the purchased products

$
$
1$10,000$

Average checkout dollar value per transaction

Return on Ad Spend (ROAS)LIVE ESTIMATE
320.0%

Gross revenue generated per dollar spent on advertising

Net Profit from AdvertisingLIVE ESTIMATE
$4,600.00

Net take-home cash after ad spend and product cost deductions

Key Metrics & Sub-Totals

3 items
Break-Even ROAS ThresholdMinimum ROAS required to avoid losing money
166.7%
Effective Cost Per Acquisition (CPA)Average advertising cost to acquire one paying order
$20.31
Net Margin on Ad RevenuePercentage of ad-driven GMV retained as net profit
28.7%

Calculation Summary & Unit Breakdown

MetricCalculated ValueNotes / Logic
Total Advertising Spend$5000.00Paid media budget
Gross Revenue Generated$16000.00Ad-driven GMV
Product Cost (COGS)40%$6400.00 total cost
Return on Ad Spend (ROAS)320%3.20x spend
Break-Even ROAS Threshold166.7%Minimum to avoid loss
Net Profit from Advertising$4600.00After ads & product cost
Effective Cost Per Acquisition (CPA)$20.31Based on $65 AOV
Net Profit Margin on Ad Revenue28.7%Take-home return

Overview & Methodology

Break-Even ROAS is the minimum Return on Ad Spend your campaigns must achieve so that ad spend plus manufacturing/fulfillment costs equal total sales ($0 net profit/loss). Any ROAS above this threshold generates net profit.

Mathematical Formulation

Gross Margin = 1 - (COGS % / 100). Break-Even ROAS = (1 / Gross Margin) × 100. ROAS % = (Revenue / Ad Spend) × 100.

Optimization Best Practices

1

If your COGS is 40%, your gross margin is 60%, meaning your Break-Even ROAS is 166.7% (1.67x return).

2

Increase your Average Order Value (AOV) through post-purchase upsells to lower your required break-even ROAS threshold.

3

Do not optimize for ROAS alone: a lower ROAS on high-volume campaigns often yields higher total net dollar profit.

Frequently Asked Questions

Q.What is the formula for Break-Even ROAS?
A.

Break-Even ROAS = 1 divided by your Gross Profit Margin percentage. (e.g. if gross margin is 50%, break-even ROAS is 1 / 0.50 = 200% or 2.0x).

Q.How much profit do I make at 320% ROAS on $5,000 ad spend with 40% COGS?
A.

$5,000 spend generates $16,000 revenue. After $6,400 COGS (40%) and $5,000 ads, net profit is $4,600.00.

Q.What is effective CPA on a $65 AOV?
A.

Generating $16,000 from $65 orders represents ~246 orders. At $5,000 ad spend, effective CPA is $20.31.