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Break-even ROAS calculator for Shopify stores

Find the ROAS at which your ads stop losing money. Enter your revenue and what it cost you, all as totals for the same period, then see your profit at the ROAS you're getting.

Example: a Shopify store's campaign
Revenue$3,000
Cost of goods−⁠$1,400
Shipping−⁠$350
Tax−⁠$250
Left after costs$1,000
Margin after costs33.33%
Break-even ROAS3.0

Spend $1,000 on ads to bring in that revenue, and the profit is $0.

How break-even ROAS is calculated

Break-even ROAS is the ROAS at which an ad pays for itself and nothing more. Above it the ad makes money. Below it every sale costs you.

  • The formula

    Break-even ROAS = 1 ÷ margin after costs

    Margin after costs is the share of revenue left once cost of goods, shipping, and tax are paid. The calculator takes your costs from your revenue and divides what is left by the revenue. Revenue is what customers paid, tax included, so the tax comes out again as a cost. Fees charged on every sale, such as a payment fee, go in other costs.

    Where it comes from: at a ROAS of 3.0, each dollar of ad spend brings in three dollars of revenue, and you keep your margin after costs of those three. The ad breaks even when what you keep equals the dollar you spent. So the ROAS you need, times your margin, is 1, and the ROAS is 1 divided by the margin.

  • Break-even ROAS by margin after costs

    Margin after costsBreak-even ROAS
    20%5.00
    25%4.00
    30%3.33
    40%2.50
    50%2.00
    60%1.67
    70%1.43

  • What the number leaves out

    Returns. A refunded order gives the revenue back and the ad spend stays spent, so a store with returns needs a higher ROAS than this one.

    Fixed costs. Rent, salaries, and software don't rise with a sale, so they aren't in the margin. Breaking even on an ad is not yet breaking even as a business.

    Repeat purchases. A customer who buys again without another ad makes the first order worth more than its own profit. A store with many of them can accept a first order below break-even.

  • Read more

    Break-even ROAS for a Shopify store shows how to find your own margin after costs, and what a good ROAS is starts from this number.

See which campaigns make money.

AdZoom does this arithmetic for every Meta and Google campaign, with your store's real orders and costs.

Coming soon to the Shopify App Store