Business Advertising
Break-even ROAS calculator
Gross margin
%
Revenue so far
Spend so far
Break-even ROAS 2.857×
1 ÷ 35% margin
Your current ROAS 3.333×
Headroom 0.476×
Current ACoS 30 %
Gross profit after ads 250
Target above break-even, never at it
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320 × 100
Break-even ROAS is one divided by gross margin. A 35% margin needs 2.86×; a 20% margin needs 5×; a 70% margin needs only 1.43×. Below the break-even figure, every extra pound of ad spend loses money.
How to find break-even ROAS
1 Enter your gross margin as a percentage.
2 Read the break-even ROAS — that is your floor.
3 Add current revenue and spend to see the headroom you have.
4 Set the target ROAS in your ad platform above the break-even, not at it.
Setting an automated bidding target at exactly break-even guarantees zero profit at best, because the platform will optimise toward that number and land around it. The target needs headroom for the costs the margin figure does not include: returns, payment fees, customer service and the share of overhead the sale should carry. A common practical rule is to set the target at break-even plus a third, then move it as actual profitability becomes clear.
Questions
Divide one by your gross margin. A 25% margin gives a break-even of 4×.
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300 × 250
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