How do I calculate my break-even ROAS?

Divide your average order value by your profit per order (after product cost, shipping, and overhead). The result is the minimum ROAS you need from your ads to break even.

What is a good ROAS for Shopify stores?

It depends entirely on your margins. A store with 70% margins can profit at 2x ROAS, while a store with 30% margins needs 4x+ to break even. That's why calculating your specific break-even ROAS matters more than chasing an industry benchmark.

Free Break-Even ROAS Calculator | WRKNG Digital

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Calculate Your Break-Even ROAS in Seconds

Q: What is break-even ROAS?

Break-even ROAS is the minimum return on ad spend needed to cover your costs without losing money. It accounts for product cost, shipping, and overhead — not just ad spend vs revenue.

Know your floor before you spend a dollar on ads.

Basic Calculator Calculator with CLV

CALCULATOR

Break-Even ROAS Calculator

Find the minimum ROAS your ad campaigns need to hit before you lose money.

Average Order Value ($)

Product Costs ($)

— or —

Product Costs (% of AOV)

Other Variable Costs ($)

Results

Break-Even ROAS

Break-Even CPA ($)

What is Break-Even ROAS?

Return on Ad Spend (ROAS) measures the revenue generated from every dollar spent on advertising. Your break-even ROAS is the minimum performance threshold — where revenue from a campaign exactly covers the cost of running it plus the cost of fulfilling each order.

What the inputs mean

Average Order Value — the average revenue per order in dollars.
Product Costs — your cost of goods sold per order, entered as a dollar amount or a percentage of AOV (not both).
Other Variable Costs — shipping, packaging, handling, processing fees, and fulfillment costs per order.

Example

Sample Calculation

Average Order Value$100

Product Costs$40

Other Variable Costs$5

Break-Even ROAS1.82

Break-Even CPA$55.00

This means for every $1 spent on ads you need at least $1.82 in revenue to cover costs. You can pay up to $55 to acquire a customer at break-even.

Break-Even ROAS = AOV / (AOV − COGS − Other Variable Costs)

Why This Number Matters

Getting your break-even ROAS wrong — in either direction — costs you money.

Underestimate It? You Lose Money.

If you assume break-even is 2.0x but the real number is 2.13x, you'll unknowingly lose money on every order. A campaign that looks profitable is actually bleeding cash — and you won't know until it's too late.

Overestimate It? You Kill Growth.

If you assume break-even is 2.5x but the real number is 2.13x, you'll shut down campaigns that are actually making money. You'll leave significant profit on the table and lose ground to competitors who know their real numbers.

ADVANCED CALCULATOR

Break-Even ROAS with Customer Lifetime Value

Factor in repeat purchases to unlock a more aggressive — and more accurate — acquisition target.

Average Order Value ($)

Customer Lifetime Value ($)

Average COGS per Order ($)

— or —

Average COGS per Order (% of AOV)

Other Variable Costs per Order ($)

Results

Average Orders per Customer

Total Fulfillment Costs (All Orders)

Customer Lifetime Gross Margin

First-Order Break-Even ROAS

Why CLV Changes Everything

The most overlooked metric in paid advertising is Customer Lifetime Value. Most marketers only consider the first purchase when calculating acquisition costs — but customers buy more than once. When you factor in repeat purchases, your true break-even ROAS drops significantly, unlocking room to acquire customers that competitors can't afford.

What the inputs mean

Average Order Value — the average amount spent per individual transaction.
Customer Lifetime Value — total revenue from a single customer over their relationship with your business. Use at least 12 months of data: total sales ÷ total customers.
COGS per Order — cost of goods per order, as a dollar amount or percentage of AOV (not both).
Other Variable Costs — processing fees, shipping, packaging, and fulfillment costs per order.

Example

Sample CLV Calculation

Average Order Value$100

Customer Lifetime Value$275

COGS per Order (30%)$30

Other Variable Costs$6

Avg Orders per Customer2.75

First-Order Break-Even ROAS0.57

A first-order break-even ROAS of 0.57 means you can lose money on the first sale and still break even across the full customer relationship. That changes everything about how aggressively you can acquire customers.

The hard truth: You are competing against businesses that understand this equation. If they are willing to spend more to acquire a customer than you are, they will win every time. Make it a goal to increase your CLV through email marketing, SMS, and increasing your average order value.

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