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Break-even ROAS calculator

Break-even ROAS is your average order value divided by the profit each order leaves before ads: AOV ÷ (AOV × gross margin - other costs per order).

Calculator

Shopify admin > Analytics.

(Price - product cost) ÷ price.

Shipping you pay, packaging, payment fees. Not ads.

Results

Break-even ROAS

3.33

Every $1 of ad spend must bring in $3.33 of sales (333% ROAS). Profit before ads: $15.00 per order.

Max CAC per order

$15.00

The most you can pay in ads to win one order and still break even.

Max ad spend, share of revenue

30%

Of revenue, at most. The same as 1 ÷ break-even ROAS.

Pure math from your inputs: same margin % and the same other costs per order.

Your average order becomes $60.00. Break-even ROAS drops from 3.33 to 3.00, and max CAC rises from $15.00 to $20.00.

Your numbers stay in your browser: nothing is sent or saved. The link keeps your inputs, so you can bookmark or share it.

How it works

The math, step by step

1. Profit before ads. Each order leaves your average order × your gross margin, minus the other costs you pay on every order, such as shipping, packaging and payment fees.

2. Break-even ROAS. Ads break even when the ad spend for an order equals that profit. ROAS is sales ÷ ad spend, so the break-even ROAS is your average order ÷ the profit per order. With no other costs, it is simply 1 ÷ gross margin.

3. Max CAC per order. The most you can spend on ads to win one order and still break even. It equals the profit per order before ads.

4. A bigger order. Per-order costs stay about the same when the order grows, so a bigger order leaves more profit for ads. The slider recalculates with a bigger average order and the same margin % and costs. It does not predict whether your orders will grow.

What it leaves out. Repeat purchases, returns and refunds. It looks at the first order only.

Formulas

  1. Profit per order before ads = AOV × gross margin - other costs per order
  2. Break-even ROAS = AOV ÷ profit per order before ads
  3. Max CAC per order = profit per order before ads
  4. Max ad spend share = profit per order ÷ AOV = 1 ÷ break-even ROAS
  5. Scenario: new AOV = AOV × (1 + growth %), with the same margin % and the same other costs

Worked example

One store, start to finish

  1. The store

    Average order $50. Gross margin 50%. Shipping, packaging and fees come to $10 per order.

  2. Profit before ads

    $50 × 50% - $10 = $15 per order.

  3. Break-even ROAS

    $50 ÷ $15 = 3.33. Every $1 of ad spend must bring in $3.33 of sales to break even.

  4. Max CAC

    $15 per order, which is 30% of revenue (1 ÷ 3.33).

  5. Order grows 20%

    A $60 order leaves $60 × 50% - $10 = $20. Break-even ROAS drops to $60 ÷ $20 = 3.00, and max CAC rises to $20.

Open this example in the calculator

Ways to test a bigger order

Give shoppers a reason to add more.

Whether these raise your average order depends on your products and shoppers. Test them, then put your new average order into the calculator.

  • BundleUp · Product page

    Quantity breaks, bundles and free gifts on the product page, so a shopper can choose two or three units instead of one.

    About BundleUp Shopify App Store

  • Cartify · Cart

    Upsells, add-ons and a reward bar in the cart drawer, with A/B tests to compare two carts on your own orders.

    About Cartify Shopify App Store

FAQ

Break-even ROAS questions

What is break-even ROAS?
The return on ad spend at which ads pay for themselves and nothing more. ROAS is revenue from ads ÷ ad spend. Below your break-even, each order from ads loses money on the first purchase. Above it, the order makes a profit.
How do I calculate break-even ROAS?
Take the profit an order leaves before ads: AOV × gross margin - other costs per order. Divide your AOV by it. With no other costs, it simplifies to 1 ÷ gross margin, so a 50% margin breaks even at a ROAS of 2.
What is a good ROAS for a Shopify store?
Any ROAS above your own break-even makes money on the first order, and the right target depends on your margin and costs, which is why one number doesn't fit every store. Repeat purchases can justify spending more, but this calculator counts the first order only.
What should I include in other costs per order?
Costs you pay on every order that are not product cost or ads: shipping you pay, packaging, payment processing fees and per-order app fees. If a fee is a percentage, enter its average amount per order.
Why does a bigger average order lower break-even ROAS?
Per-order costs like shipping and packaging stay roughly the same when the order grows, so a bigger order leaves more profit to spend on ads. The scenario slider assumes your margin % and other costs stay the same; if they change, enter the new numbers instead.
What is the difference between ROAS and max CAC?
ROAS is a ratio: revenue for each unit of ad spend. Max CAC is an amount: the most you can spend in ads to win one order and still break even. Here CAC means the ad cost per order, so it equals the profit an order leaves before ads.

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