ROAS calculator with break-even ROAS
ROAS (return on ad spend) is the revenue your ads generate divided by what you spent on them. A ROAS of 3x means every 1 spent returned 3 in revenue. Whether that's profitable depends on your margin: break-even ROAS is 1 divided by your gross margin.
ROAS
3.6x
Every 1 spent on ads returned 3.6 in revenue.
- Break-even ROAS
- 2.5x
- Gross profit after ads
- 2,200
- Cost per order
- 33.33
- Average order value
- 120
Your ROAS is above break-even, so these ads cover their product costs. Remember shipping, fees, and returns also come out of the margin.
How do I use the ROAS calculator?
- Enter your ad spend and the revenue attributed to those ads for the same period.
- Add your gross margin to see break-even ROAS and profit after ad spend.
- Add the number of orders to see cost per order and average order value.
Frequently asked questions
How do you calculate ROAS?
Divide the revenue from your ads by the amount spent on them. 18,000 in revenue from 5,000 in ad spend is a ROAS of 3.6x.
What is a good ROAS?
There's no universal number. A good ROAS is one above your break-even ROAS, with enough room left to cover shipping, fees, returns, and overheads. A store with a 25% margin needs a much higher ROAS than one with a 70% margin.
How do I calculate break-even ROAS?
Divide 1 by your gross margin as a decimal. With a 40% margin, break-even ROAS is 1 ÷ 0.4 = 2.5x. Below that, the gross profit from ad-driven sales doesn't cover the ad spend.
What's the difference between ROAS and ROI?
ROAS compares revenue with ad spend only. ROI compares profit with total investment, so it accounts for product costs and other expenses. ROAS is quicker to track per campaign; ROI shows whether the business made money.