Cloud Ten / Break-even ROAS calculator
The ROAS you need just to stand still.
Work out the ROAS you need just to break even. Enter order value, cost of goods, shipping and fees to see your break-even ROAS and maximum CPA.
Break-even is the floor. To fund overheads and growth you need to clear it, not meet it.
What is break-even ROAS?
Break-even ROAS is the point where advertising exactly pays for itself. Every pound of spend returns just enough gross profit to cover that pound. Below it you are buying revenue at a loss.
Contribution margin is what is left of an order after cost of goods, shipping, fulfilment and payment fees, before overheads.
Why the number surprises people
On a 25% contribution margin you need a 4.0x ROAS just to stand still. Plenty of brands scale hard at 3x believing they are winning, because ROAS is the number the platform shows and margin is the number it does not know.
Break-even is a floor, not a target
Hitting it means advertising paid for itself and contributed nothing to rent, salaries or profit. Set your real target above it.
Frequently asked
What is break-even ROAS?
The return on ad spend at which advertising exactly pays for itself. Below it you lose money on every sale; above it you make gross profit.
How do I calculate break-even ROAS?
Divide 1 by your contribution margin. A 40% margin gives a break-even ROAS of 2.5x. A 25% margin needs 4.0x.
Should I target break-even ROAS?
No. Break-even is the floor, not the goal. It covers the cost of the ads and nothing else - no overheads, no salaries, no profit.
Is break-even ROAS the same as BEROAS?
Yes. BEROAS is simply the abbreviation, and the two are used interchangeably.