ROAS calculator
ROAS and break-even ROAS calculatorIs your ad money making money?
Type your ad spend, the revenue it brought in and your margin. You'll see your ROAS, the ROAS you need to break even, and which side of that line you're on.
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Use one month, or one campaign, so the spend and the revenue cover the same stretch of time.
4.0your ROAS: revenue divided by ad spend
2.5your break-even ROAS: 1 divided by your margin
Above break-even: each ad dollar brings back more profit than it costs.
This is arithmetic on the numbers you type, not a prediction. Nothing you type leaves this page.
What ROAS tells you, and what it hides
ROAS is revenue divided by ad spend. A ROAS of 4 means each ad dollar brought back four dollars in sales, before you pay for the products, shipping and fees behind those sales.
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That last part is why ROAS alone can mislead you. A store that keeps a small share of each sale needs a much higher ROAS than one with a wide margin, so two stores can show the same ROAS while one makes money and the other loses it.
So start from your margin, which is the share of every sales dollar your business keeps after paying for products, shipping, payment fees and returns. The calculator turns that margin into your break-even line, so you can see at a glance whether the ads are paying for themselves.
How to find your break-even ROAS
Your break-even ROAS is 1 divided by your margin. Above that line your advertising earns money, and below it every sale the ads bring in costs you money.
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- Add up your costs for each dollar of sales, including product cost, shipping, payment fees and returns, using the figures in your store's own records rather than estimates.
- Subtract those costs from 1 to find your margin, so costs of 55 cents on every dollar leave you a margin of 0.45.
- Divide 1 by your margin to get your break-even ROAS, which works out to about 2.2 at a margin of 0.45.
- Repeat the math for each product line, because a line that keeps 60 cents breaks even near 1.7 while a line that keeps 30 cents needs about 3.3, and a single store-wide goal hides that difference.
Setting a ROAS goal
Take the profit you want off your margin, then divide 1 by what's left. That gives you a goal that pays for the ads and leaves the profit you planned on.
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Say your margin is 0.45 and you want 30 cents of profit from each sales dollar. That leaves 0.15, and 1 divided by 0.15 is about 6.7, so your goal is a ROAS near 6.7. Redo the math whenever a cost changes, such as a new supplier price or a new shipping rate, because each one moves your line.
When the numbers look good but cash feels tight
Check the margin you typed against your real costs first. Returns, payment fees and shipping you absorb are the usual gaps.
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Then check what counts as revenue in your ad reports. If the account counts a sale more than once, or counts sales the ads didn't bring, your ROAS reads higher than the money in the bank. Our Shopping and Performance Max page covers how we set up order tracking so each sale counts once.
Questions
What is a good ROAS?
A good ROAS is any ROAS above your own break-even line, and that line depends entirely on the margin your products carry. Divide 1 by your margin to find it: a store that keeps 40% of each sale breaks even at a ROAS of 2.5, while a store that keeps 20% needs 5.
How do you calculate ROAS?
Divide the revenue your ads brought in by the amount you spent on those same ads, using the same stretch of time for both numbers. Spend $1,000 and bring in $4,000, and your ROAS is 4.
What is break-even ROAS?
Break-even ROAS is the point where the profit from ad-driven sales exactly covers what the ads cost, with nothing left over. It equals 1 divided by your profit margin, so a thinner margin always means a higher line.
Is ROAS the same as ROI?
No. ROAS compares revenue with ad spend alone, while ROI looks at the profit left after every cost, including products, shipping and fees. That difference explains how a campaign can show a strong ROAS and still lose money.
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