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Break-even ROAS calculator

The short answer

Break-even ROAS is 1 divided by your contribution margin: what you keep from each order after product cost, shipping and payment fees. Keep 40% and every A$1 of ads must bring back A$2.50 in sales just to break even. Enter your numbers below to get yours, plus your break-even cost per purchase and a target to aim for.

Your numbers

Results update as you type. Nothing you enter leaves this page.

What a customer spends per order, on average. Your store platform reports it.

Product cost: how do you know it?

Order value minus what the products cost you, as a share of order value.

Your average cost to send an order, less any delivery fee the customer pays. Leave blank if it's zero.

From your payment provider's statement. Not sure? 2% is the default our plans use.

Fine-tune (optional)

How far under break-even to aim. Our plans start at 20%.

Meta still counts a refunded order as a sale, so build your real return rate in.

Adds what your budget has to bring in each week, and roughly how many purchases it can buy.

Your break-even

Enter your average order value and your margin (or product cost) to see your numbers.

Break-even is one number. The free 3-minute quiz checks the rest: tracking, structure, optimisation event and offer.

Take the free 3-minute quiz

How the numbers are worked out

These are the same formulas every Off Retainer plan for an online store uses to set its targets.

  1. Contribution margin = gross margin % − (shipping you pay ÷ average order value) − payment fees %. If you refund a share of orders, it's then reduced by that share.
  2. Break-even cost per purchase = average order value × contribution margin. It's also what you keep from an order before ads.
  3. Break-even ROAS = 1 ÷ contribution margin.
  4. Target cost per purchase = break-even cost per purchase × (1 − your buffer). Our plans start with a 20% buffer.
  5. Target ROAS = average order value ÷ target cost per purchase.
  6. Weekly sales your ads must add = weekly budget × break-even ROAS. Weekly budget is your monthly budget ÷ 30.4 × 7.

A worked example

Hypothetical example. A store's average order is A$100. Its gross margin after product cost is 60%. It pays A$10 to ship an order, and 2% in payment fees.

Contribution margin = 60% − 10% − 2% = 48%. It keeps A$48 of every order before ads. Break-even cost per purchase is A$48.00, and break-even ROAS is 1 ÷ 0.48 = 2.08x. With a 20% buffer, the target is A$38.40 per purchase, a ROAS of 2.60x.

What to do with your numbers

  • Judge spend on your store's sales, not only Meta's ROAS. Work out MER (total store sales ÷ total ad spend) each week and keep it at or above your target, never below break-even. ROAS vs MER.
  • If break-even is out of reach, fix the offer first. Lift the order value with bundles or a free-shipping threshold, lead with your highest-margin product, or cut what each order costs you. Better targeting can't fix the maths. Break-even ROAS, explained.
  • Check your budget can feed the event you optimise for. If it buys fewer than about 10 purchases a week, Meta has very little to learn from. Learning limited, explained.
  • Use the same number before you test a new channel. A cheaper click isn't a cheaper sale. Divide the cost per click by the share of visitors who buy, and compare that with your break-even cost per purchase. ChatGPT ads in Australia: what to check before you spend.

This calculator leaves out repeat orders. Your full plan gives some credit for them, from your repeat purchase rate, before it sets your targets. Plans for online stores: online fashion stores, online beauty & skincare stores, online jewellery & accessories stores and online home & lifestyle stores.

Questions

Break-even ROAS: common questions

What is break-even ROAS?

Break-even ROAS is the return on ad spend at which your ads exactly pay for themselves. Below it, every sale your ads bring in loses money once product cost, shipping and payment fees are paid. It equals 1 divided by your contribution margin, so a store that keeps 40% of each order after those costs breaks even at a ROAS of 2.5x.

How do I calculate break-even ROAS?

Take your gross margin %, subtract shipping as a share of your average order, and subtract your payment fees. That is your contribution margin. Break-even ROAS is 1 divided by it. Break-even cost per purchase is your average order value multiplied by it. The calculator on this page does both.

What is a good ROAS for an Australian online store?

There isn’t one number that suits every store, because it depends on your margin. A good ROAS is one comfortably above your own break-even. Our plans start the target 20% under break-even cost per purchase, which puts the target ROAS a quarter above break-even ROAS. Then judge it on your store’s own sales (MER), not only on what Meta reports.

What is break-even CPA?

Break-even CPA (cost per acquisition, or cost per purchase) is the most you can pay in ads for one order without losing money on it. It equals your average order value multiplied by your contribution margin: what you keep from an order before ads.

Should I compare break-even ROAS with Meta’s ROAS or with MER?

Both, for different jobs. Use Meta’s ROAS to compare ads with each other. Use MER (total store sales divided by total ad spend, from your store platform) to decide whether the spend is worth it, because Meta can count sales you would have made anyway. ROAS vs MER, explained.

Why does the calculator ask about refunds and returns?

Meta counts a purchase when the order is placed. None of the main store platforms sends refunds or returns back to Meta, so they don’t come off Meta’s numbers. If you refund a meaningful share of orders, build that rate into your break-even.

Break-even is the first number. Find the rest.

The free 3-minute quiz checks your tracking, structure, optimisation event and offer, and shows your break-even ROAS in the diagnosis. Your full plan is A$149 incl. GST if you want it.

Take the free 3-minute quiz

Free quiz and check-up. No card needed. Questions? Email us.

General information, not financial advice.