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Free PPC & CRO tool

ROAS Calculator

The ROAS Calculator works out your break-even return on ad spend from average order value, product costs and fees, the minimum ROAS you need before ads make a profit. Then it models total revenue, margin and net profit at your actual spend and ROAS, so a healthy-looking number is never hiding a loss.

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💵 Revenue & Costs
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📈 Ad Performance
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2.50 Break-Even ROAS

Any ROAS below this is a net loss.

Financial Breakdown
Total Revenue $20,000
Gross Margin 60%
+$8,000 Net Monthly Profit

Profit after Ad Spend, COGS, and Fees.

How it works

How to use the ROAS Calculator

  1. Enter your unit economics

    Add average order value, cost of goods and per-order shipping and processing fees.

  2. Read your break-even ROAS

    This is the lowest ROAS at which ad spend pays for itself.

  3. Add spend and actual ROAS

    Enter monthly ad spend and the ROAS you are achieving or forecasting.

  4. Check net profit

    See revenue, margin and profit after costs, plus how much headroom you have above break-even.

How to calculate ROAS

Return on ad spend is revenue from ads divided by the cost of those ads. Spend £1,000 and generate £4,000 in sales and your ROAS is 4, often written as 4:1 or 400%.

ROAS on its own says nothing about profit, though. That depends on how much each sale costs you to fulfil, which is why break-even ROAS matters more than any headline figure.

Worked example

InputValue
Average order value£60
Cost of goods£30
Shipping and payment fees£6
Gross margin£24 (40%)
Break-even ROAS1 ÷ 0.40 = 2.5

At a ROAS of 2.5, every pound of ad spend is cancelled out by product and fulfilment costs. At 3.5, the same business keeps about 40p in every pound of spend as contribution. At 2.0, it loses money on every sale even though the campaign "returns" double its cost.

Ways to improve profitability

  • Raise average order value with bundles, thresholds for free delivery or upsells.
  • Cut wasted spend with negative keywords and tighter targeting.
  • Bid by margin, pushing high-margin products harder than low-margin ones.
  • Count repeat purchases. If customers come back, a first order at break-even can still be very profitable over their lifetime.

Questions

ROAS Calculator FAQs

What is break-even ROAS?

The ROAS at which ad spend exactly covers your product and fulfilment costs, leaving zero profit. It is calculated as 1 divided by your gross margin. With a 40% margin, break-even ROAS is 2.5.

What is a good ROAS?

Any ROAS comfortably above your break-even figure. A 4:1 ROAS is excellent for a business with 50% margins but loses money for one with 20% margins.

Does it include tax and overheads?

No. It covers product cost, fees and ad spend, giving a contribution margin view. Staff, rent, software and tax are not included.

Which currencies are supported?

GBP, USD and EUR.

Is my data uploaded?

No. All calculations run in your browser.

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