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The Breakeven ROAS Calculator.
Six numbers from your P&L plus your margin target, three answers back: the ROAS where ads stop losing money, the ROAS that hits your margin target, and the one founders usually skip - the higher ROAS your first tier of spend needs while it carries your fixed costs.
Built by HoloGrowth - 50+ DTC brands, $50M+ partner revenue. No email, no gate - the math runs entirely on this page.
Your numbers in, your targets out.
Pull the inputs from your store backend and P&L, not from memory - the honest-inputs guide below the calculator shows where founders usually flatter each one.
Total revenue divided by total orders, last 90 days, after discounts
Landed product cost: manufacturing plus inbound freight, duties, and packaging - as a % of order value
Outbound shipping, 3PL pick-and-pack, packing materials - per order, in dollars
Card and platform payment fees - the processor's cut of each order
Salaries, software, rent, retainers, your own pay - everything you owe in a month with zero orders
Total paid media across Meta, Google, TikTok - the spend your ROAS is measured on
What you want left after variable costs AND ad spend, as % of revenue - this is CM3 on our Scaling Scorecard; 15%+ is the green zone. Enter 0 for pure breakeven
The output is only as good as the inputs - and the ROAS you compare it to. If that ROAS comes from platform dashboards, read The Agency Incentive Problem first - in the accounts we've audited, Google Ads typically overstates its contribution by 80-90% and Meta typically understates by 20-80%. Measure the number you hold against this bar with the ROAS calculator. Once you know the floor, set the goal with the target ROAS calculator, and find how far you can scale with the spend ceiling calculator. More free tools: the Scaling Scorecard and the full tools library.
How breakeven ROAS actually works.
Breakeven ROAS = AOV ÷ (AOV - variable costs per order)
On audit calls we ask founders for their breakeven ROAS. Most - including founders doing $400K+ a month - answer some version of "I'd have to double-check." Ninety seconds in the calculator above fixes that.
Breakeven ROAS is the return on ad spend where a sale stops losing money. Variable costs are everything that scales with each order: landed product cost (COGS), shipping and fulfillment, and payment fees. Whatever is left after those is your contribution margin - the money each order actually contributes before ads.
Worked example: $80 AOV, 30% COGS ($24), $8 shipping and fulfillment, 3% payment fees ($2.40). Variable costs: $34.40. Contribution per order: $45.60. Breakeven ROAS: $80 ÷ $45.60 = 1.75x.
Below 1.75x, every ad dollar buys revenue at a loss. At exactly 1.75x, ads pay for themselves and nothing else. That is the floor, not the target - which is why the calculator also asks what margin you want left after ads and computes the ROAS that delivers it. And it is why the number above your breakeven still is not safe, for the reason in the next section.
The decision bands: what your margin ceiling means.
The calculator grades your contribution margin before ads - the mathematical ceiling on what you can keep after ad spend - on the same four bands as the Scaling Scorecard. These are decision rules, not benchmarks. They come from the arithmetic of your own inputs, not from industry averages.
| Contribution margin before ads (your ceiling) | Band | Decision rule |
|---|---|---|
| 0% or below | STOP | No ROAS can make this profitable - the unit economics lose money before ads enter. Fix price, COGS, or the offer first. |
| Above 0% to 5% | RED | Technically above water, practically fragile. One returns spike or CPM jump erases the margin. Do not scale into this. |
| 5-15% | YELLOW | Workable, not scalable. Hold spend, improve the inputs - AOV, COGS, conversion - before raising budgets. |
| 15%+ | GREEN | Room to scale. The ceiling can absorb the higher CAC that comes with colder audiences as spend rises. |
Why your first tier of spend needs a higher ROAS.
The standard breakeven formula has a blind spot: it only counts costs that scale with orders. Your business also carries costs that don't - salaries, software, rent, retainers. Until organic and repeat revenue cover them, your ad spend has to. That means there are two targets, not one.
Until fixed costs are covered
Ad-driven revenue has to pay variable costs AND its share of the overhead. First-tier ROAS = breakeven ROAS × (1 + fixed costs ÷ ad spend). In the worked example: 1.75x × (1 + $25,000 ÷ $50,000) = 2.63x.
After fixed costs are covered
Every incremental dollar of spend only has to clear variable costs. The bar drops back toward plain breakeven - 1.75x in the example. Incremental spend is cheaper than your P&L makes it look.
This one distinction explains two things that confuse founders: why an account running "above breakeven" at 2.1x still shows a loss on the P&L (it is below the first-tier number), and why cutting a campaign at 1.9x can make the month worse, not better (it cleared tier 2 and was quietly paying down your fixed costs).
What to enter - honestly.
Garbage in, confident garbage out. Here is what each input means - and where founders usually flatter the number.
Average order value
Total revenue divided by total orders, from your store backend, over the last 90 days. Not launch week, not the holiday spike. If you discount heavily, use post-discount AOV - the customer pays the discounted price, and so does your math.
COGS %
Landed cost as a % of AOV: manufacturing plus inbound freight, duties, and packaging. One of the most flattered numbers in DTC - founders quote the factory unit price from the last negotiation and forget the freight. Pull it from your latest invoices.
Shipping + fulfillment per order
Everything it costs to get one order out the door: outbound shipping, 3PL pick-and-pack fees, packing materials. If you offer free shipping, it did not become free - it moved into this field.
Payment fees %
The processor's cut of each order: card fees, platform payment fees, the buy-now-pay-later premium if you offer it. It looks small. It comes off the top of every single order.
Monthly fixed costs
Everything you owe in a month with zero orders: salaries, software, rent, retainers, your own pay. The number the standard breakeven formula ignores - and the reason brands that are "profitable on paper" lose money.
Monthly ad spend
Total paid media across every channel, monthly. It sets how thickly fixed costs load onto tier one: $25,000 of overhead inflates the first-tier target by 50% at $50,000 of spend - and by 167% at $15,000.
Target net margin after ads
What you want left as a % of ad-driven revenue after variable costs and ad spend. This is CM3 - the first metric on our Scaling Scorecard, where 15%+ is the green zone. Enter 0 and you get breakeven back: that is the floor, not a goal.
Want the full 7-step version run on your brand? This calculator is one layer of a bigger diagnosis. The complete process - rebuild the revenue, correct the attribution, score five metrics, name the constraint, price the leaks - is published free: how to run an ecommerce profitability audit. Want it run for you? That is the $5,000 Profit Clarity Audit, delivered in 14 days. Double-backed: 100% money-back if it wasn't clearly worth it, or the full fee becomes a credit if we can't quantify $75K in annual profit upside.
The rest of the toolkit.
Each one answers a different question in the same system. Same rules everywhere: your numbers stay in your browser.
The Honest ROAS Calculator
Two numbers in, your ROAS out - add total revenue and your blended MER appears next to it.
MER Calculator
Total revenue over total spend - the number no attribution model can inflate.
Target ROAS Calculator
The blended target to hand your agency or media buyer - breakeven plus the margin you keep.
Spend Ceiling Calculator
Your marginal ROAS floor and the coverage line that decide how far spend can scale.
CAC Payback Calculator
How many days until an acquired customer pays back their own CAC.
The 90-Day LTGP:CAC Grader
Grade your ratio on gross profit and a real 90-day window.
The Scaling Scorecard
All five metrics in one pass - the scale / hold / fix / kill thresholds.
Already at $1M+/year and spending $30K+/month on ads?
You have the target. Is the ROAS you compare it to real?
This calculator gives you the number to clear. It can't tell you whether the ROAS in your dashboards is the ROAS you're actually getting - and at your spend, that gap is where the money goes. On a free 30-minute call we sanity-check your numbers against your P&L and name your most likely constraint live.
For brands at $1M+ per year spending $30K+/month on ads. 8 strategy calls a week.
Breakeven ROAS, answered.
The return on ad spend where an ad-driven sale stops losing money. The formula: AOV divided by (AOV minus variable costs per order), where variable costs are landed COGS, shipping and fulfillment, and payment fees. Example: an $80 AOV with $34.40 of variable costs leaves $45.60 of contribution per order, so breakeven ROAS is 80 ÷ 45.60 = 1.75x. Below that, every ad dollar buys revenue at a loss.
There is no universal number for what your break even ROAS should be - your margins set it. Take the percentage of revenue left after variable costs (COGS, shipping, payment fees), subtract the net margin you want to keep, and divide the result into 100. A brand keeping 50% after variable costs that wants 15% net needs 100 ÷ (50 - 15) = a 2.86x blended ROAS. And until ad-driven revenue covers your fixed costs, the first tier of spend needs more than that - the calculator above computes both numbers.
Two usual reasons. First, breakeven ROAS only covers variable costs - your ad spend also has to carry fixed costs (salaries, software, rent) until other revenue does, which pushes the real first-tier target higher. Second, the ROAS you are reading may not be real: platform dashboards grade their own homework. In the accounts we've audited, Google Ads typically overstates its contribution by 80-90% and Meta typically understates by 20-80% - here is why that happens structurally. Recompute blended ROAS from your own books before you trust the comparison.
Meaningless without your margin next to it. At a 20% contribution margin before ads, a 4x ROAS still loses money after ad spend (20% minus the 25% of revenue that spend represents = -5%). At a 60% margin, a 2x leaves 10% of revenue as profit. Judge any ROAS against your own breakeven and target numbers, not against another brand's.
Breakeven ROAS is the floor. It is the return at which an ad dollar stops losing money, computed from your margins alone. Target ROAS is the number you actually steer by. It is breakeven plus the profit you intend to keep, so it is always higher. Run breakeven here first, then set the blended target with the free Target ROAS Calculator - the two are designed as a pair.
Blended - total ad-driven revenue divided by total ad spend, pulled from your own books, not from Ads Manager. Platform ROAS self-credits across channels, so comparing a platform number against your breakeven produces confident, wrong decisions. The math on this page is only as good as the ROAS you hold it against.
No. The math runs entirely in your browser - nothing you type is stored or sent anywhere, and no email is required. The one thing our analytics records is that the tool ran and which verdict band it landed in - never your numbers. It is free because the hard part is not the formula, it is trusting the inputs. When you get to the point where the inputs are the problem, that is what the free Strategy Call is for.
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Free Breakeven ROAS Calculator by HoloGrowth: https://hologrowth.com/tools/breakeven-roas-calculator/