Break-Even ROAS Calculator

The Break-Even ROAS Formula Explained

If you are running Meta Ads, TikTok Ads, or Google Ads, knowing your break-even metrics is the difference between scaling profitably and burning through cash.

How to Calculate Break Even ROAS

The break even ROAS formula is surprisingly simple, but many dropshippers miscalculate it by forgetting hidden fees (like merchant processing). The official formula is:

Break-Even ROAS = Selling Price / (Selling Price - COGS - Shipping - Fees)

Alternatively, you can calculate it using your profit margin: Break-Even ROAS = 1 / Gross Profit Margin %. For example, if your gross margin is 50%, your break-even ROAS is 1 / 0.50 = 2.0.

What is Break-Even CPA?

CPA stands for Cost Per Acquisition. Your Break-Even CPA represents the absolute maximum amount of money you can spend on ads to acquire a single customer before you start losing money. It is exactly equal to your gross profit in dollars.

If a product sells for $100 and it costs you $40 to source, ship, and process the payment, your gross profit is $60. Your Break-Even CPA is therefore $60.

Using a Target ROAS Calculator

Breaking even is not the goal of a business—profit is. A Target ROAS is the metric you actually want to optimize for in your ad accounts to hit your desired net income. If you want a 20% net profit margin on that same $100 product, you must acquire the customer for $40 (Target CPA) instead of $60. That would require a Target ROAS of 2.5.