Most businesses running paid ads have no idea if they're making money or burning it. This tells you the exact ROAS your ads need to reach before you start profiting.
The average amount a customer spends per order or purchase.
The cost to produce, buy, or fulfil one order. Include shipping if you absorb it.
What you're currently spending on paid ads per month (Meta, Google, TikTok, etc.).
Add your current ROAS to see if your ads are actually making money right now.
Your ad platform's reported ROAS for the last 30 days. Found in Ads Manager.
Enter your average order value and cost per order above to see your break-even ROAS.
The number on its own doesn't tell you much. Here's the context.
ROAS measures revenue generated per pound spent on ads. But revenue isn't profit. A 3× ROAS on a 60% margin product is very different to a 3× ROAS on a 20% margin product. Break-even ROAS is the number that actually matters.
Meta, Google, and TikTok all use attribution windows that can double-count conversions. Your actual ROAS is usually 20–40% lower than what the dashboard shows. Always cross-check against actual revenue in your shop or CRM.
If your break-even ROAS is high (above 3×), there are two ways to fix it — improve your ads, or improve your margins. Raising your AOV through bundles, upsells, or pricing is often faster than improving ad performance.
Typical break-even ROAS by business type. Yours will be highlighted once you enter your numbers.
ROAS stands for Return on Ad Spend. It's calculated as Revenue ÷ Ad Spend. A 3× ROAS means for every £1 you spend on ads, you generate £3 in revenue. It does not tell you if you're profitable — that depends on your margins.
Break-even ROAS is the minimum ROAS where your gross profit exactly covers your ad spend. Calculated as 1 ÷ Gross Margin. Anything above it: you're making money from ads. Anything below it: your ads are consuming more than they're generating. Most businesses don't know this number, which is why so much ad spend gets wasted.
No — and deliberately so. This calculator shows your gross profit break-even, which is the right starting point for evaluating ad performance. Overheads (rent, staff, software) are fixed costs that exist whether you run ads or not. Once you know your gross break-even, you can layer in overheads to find your full net break-even.
Three options. First, improve margins — raise prices, reduce COGS through better supplier terms, or cut unnecessary fulfilment costs. Second, raise your AOV — bundle products, add upsells, increase minimum order values. Third, focus on customer lifetime value — if customers reorder, the first order doesn't need to profit, it just needs to be close to break-even. If ads genuinely can't work for your margin structure, that's important to know before spending more.
Three common causes. Attribution window inflation — Meta and Google claim credit for sales that would have happened anyway (organic, email, direct). View-through attribution — someone saw your ad but didn't click it, bought later, and the platform takes credit. Margins not accounted for — a 3× reported ROAS sounds great until you realise your break-even is 3.5×. Always reconcile platform-reported revenue against actual shop revenue monthly.
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