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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 typically overstates its contribution by 80-90% and Meta typically understates by 20-80%. More free tools: the Scaling Scorecard and the full tools library.
How breakeven ROAS actually works.
Breakeven ROAS = AOV ÷ (AOV - variable costs per order)
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.
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 to 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.
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 - 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 2.9x 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 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.
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. 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/