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What ROAS do you actually need?
Enter your gross margin to see the minimum ROAS before ads lose money, and the target you need to hit your profit goal.
How do you calculate break-even ROAS?
Break-even ROAS is 1 divided by your gross margin after fees and delivery. At a 40% margin, break-even ROAS is 2.5x. To keep a set profit after ad spend, divide 1 by your margin minus the profit you want: at a 40% margin and 10% profit goal, the target is 1 ÷ 0.30 = 3.33x.
| Gross margin | Break-even ROAS | Target ROAS with your profit goal |
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Gross margin should include payment fees and delivery, not just the cost of the product.
Set the right targets with usThe formula
Break-even ROAS is 1 divided by your gross margin. At a 40% margin you need £2.50 of revenue for every £1 of ad spend just to break even. To keep 10% profit after ads, divide 1 by the margin minus the profit you want: 1 ÷ (0.40 − 0.10) = 3.33x.