1. Contribution before ads
AOV minus product, shipping, payment, expected refund and chargeback costs.
Paid traffic reality check
Break-Even ROAS Calculator for Ecommerce
Find the ROAS your ads must beat after COGS, shipping, processing fees, refunds and chargebacks—not the flattering number from gross margin alone.
Enter your order economics
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The formula that prevents false scaling
2. Maximum CPA
The contribution available to acquire one order before profit reaches zero.
3. Break-even ROAS
AOV divided by maximum CPA. Your operating target should remain safely above it.
Break-even ROAS FAQ
What is break-even ROAS?
Break-even ROAS is the minimum revenue generated per dollar of advertising required to cover variable order costs. A 2.20x break-even ROAS means each $1 of ad spend must generate $2.20 in revenue before fixed overhead and tax.
Why is gross margin not enough?
Gross margin often excludes payment fees, shipping, refunds and chargebacks. Those costs reduce the contribution available to buy traffic, so gross-margin-only ROAS targets can scale losses.
Should my target ROAS equal break-even ROAS?
No. Target ROAS should normally sit above break-even to leave room for overhead, tax, cash-flow delays and performance volatility. Use the stress test to estimate a safer operating floor.
How do refunds affect break-even ROAS?
Refunds reduce expected revenue while acquisition, payment and fulfillment costs may remain. Even a small refund-rate increase can materially raise the ROAS required to stay profitable.
Turn the ROAS limit into a full profit plan
Add monthly costs, order volume, and sales-channel comparisons next.
Methodology: expected contribution per order using user-entered assumptions. Educational planning tool, not financial advice. Verify current platform fees and actual refund data. Last reviewed July 12, 2026.