Break-even ROAS
calculator.
Ad-only break-even ROAS is one divided by contribution margin before advertising, expressed as a decimal. At a 40% contribution margin, the threshold is 2.5×. This is a first-order unit-economics calculation before fixed overhead, agency fees or profit targets. It does not establish an incremental return from advertising.
Which costs belong in the margin?
Start with revenue on a consistent basis, then subtract the variable costs associated with fulfilling that order: product cost, payment fees, fulfillment, shipping subsidy and expected returns or refunds. Use contribution after those costs and before advertising. Exclude taxes collected for remittance from the revenue base. Avoid counting shipping revenue in one side of the calculation and treating its cost inconsistently on the other.
Gross product margin alone may overstate how much is available to pay for ads. Fixed overhead, agency fees and a profit requirement still need to be covered separately.
How do ROAS and allowable CPA relate?
Ad-only break-even ROAS = 1 ÷ contribution margin decimal.
Allowable first-order ad cost per order = average order revenue × contribution margin decimal.
For a fictional $100 order with $60 in variable costs, $40 remains before ads. Spending $40 to acquire that order gives 2.5× revenue/ad spend, with zero contribution after ads and before overhead. A profitable target needs a buffer rather than treating that threshold as a growth goal.
Why is platform ROAS not the whole decision?
ROAS uses the conversion value and attribution defined in the reporting platform. Google explains that conversion value / cost depends on the conversion values assigned in the account. Match revenue definitions, currency, refunds and reporting windows before comparing platforms. Do not add overlapping attributed revenue from multiple platforms.
Repeat purchases may support a different allowable acquisition cost, but that requires observed cohorts, cash-flow planning and a defined payback window. This calculator does not forecast repeat revenue or isolate the causal effect of ads.
Use the threshold in a wider plan
Check delivery against your ad spend pace, review the landing page checklist, and explore Shopify growth services or management pricing.