The one number before you spend a dollar
Break-even ROAS is the point where your ads stop losing money and start making it. It's just your price divided by what's left after the real cost of one sale:
Break-even ROAS = price ÷ (price − COGS − shipping − payment fees − pick/pack)
That's the same as 1 ÷ your contribution margin. AI can run the arithmetic and set your target the instant you hand it your unit economics; the calculator on this page does the same live, so use it to sanity-check by hand.
Fastest path: one prompt, end to end
🤖 AI prompt — paste into ChatGPT / Claude
You are my unit-economics analyst. Here are my per-order numbers: price [price], product cost/COGS [COGS], shipping [shipping], payment fees [fees], pick/pack + packaging [pickpack], expected returns rate [returns %].
1. Add up the real cost of one sale and subtract from price to get contribution profit and contribution margin %.
2. Break-even ROAS = price ÷ contribution profit. Show the arithmetic.
3. Set a TARGET ROAS 20-30% above break-even so ads also cover overhead and leave profit.
Output ONE markdown table: Line item | Amount, then a second table: Contribution margin % | Break-even ROAS | Target ROAS.
Use ONLY the numbers I pasted. Do not guess or fill in a missing cost; if a line is blank, ask me for it and leave the result blank until I provide it. Never present an assumed number as if I gave it to you.
Or do it in 5 steps
- List every per-unit cost. Product/COGS, shipping, payment fees, pick/pack and packaging, and an allowance for returns. "Free shipping" still comes out of your pocket, so it belongs here.
- Get contribution profit. Price minus those costs. Divide by price for your contribution margin %.
- Compute break-even ROAS. Price ÷ contribution profit (or 1 ÷ margin). This is the line you don't cross.
- Set a target above it. Aim roughly 20-30% higher so ads also cover overhead and leave real profit. Break-even is the floor, not the goal.
- Recompute when a cost moves. A supplier price rise, a shipping change, or a new payment fee all shift the line. Use a separate number per product category, since margins differ.
Done looks like: a break-even ROAS and a target ROAS written down for each product, before any campaign goes live.
Worked example (illustrative, use the calculator on this page for yours)
| Line item | Amount |
|---|
| Price | $60.00 |
| Product cost (COGS) | $22.00 |
| Shipping | $6.00 |
| Payment fees | $2.00 |
| Pick/pack + packaging | $2.00 |
| Contribution profit | $28.00 |
Contribution margin = 28 ÷ 60 = 46.7%. Break-even ROAS = 60 ÷ 28 = 2.14x. Below 2.14x this order loses money; a sensible target is ~2.6-2.8x so the ads also carry overhead. These are made-up numbers to show the method, run yours through the calculator on this page.
Recompute whenever a cost changes.