Return on ad spend alone can fool you — this shows your ROAS, the break-even ROAS from your margin, and whether the ads actually put money in your pocket.
| Gross margin | Break-even ROAS | Example target |
|---|---|---|
| 30% | 3.33x | ≥ 5x |
| 50% | 2.00x | ≥ 3–4x |
| 70% | 1.43x | ≥ 2–3x |
Break-even ROAS = 1 ÷ gross margin. Add fixed overhead before treating break-even as true profit.
ROAS measures revenue returned per ad dollar, not profit. Two stores can both report 4x and one make money while the other loses it, because the difference is the gross margin. That is why this calculator pairs your ROAS with the break-even ROAS = 1 ÷ gross margin: only revenue above that line actually covers product and ad costs. A low-margin product needs a much higher ROAS just to break even than a high-margin one.
Use ROAS to compare campaigns and creatives, but judge profitability on the net figure after costs. Leave headroom for fixed overhead, and treat repeat customers separately — a first order that only breaks even can be profitable over the customer's lifetime.
Revenue from ads ÷ ad cost. ROAS 4 = $4 revenue per $1 spent.
It depends on margin; 50% margin breaks even at 2x before overhead, many target 3–5x.
Revenue isn't profit — product and platform costs can leave you negative even above 1x.
ROAS is what the campaign returned. Break-even ROAS is the minimum it must return for ad-driven sales to cover product and ad costs (1 ÷ gross margin). When your ROAS is above break-even, the campaign contributes profit; below it, every ad sale erodes margin.
After calculating ROAS, use our AI Pricing Copilot to find the price that maximizes profit after ad costs on every marketplace.
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