Break-even ROAS by margin
Break-even ROAS is the minimum return on ad spend where contribution margin equals ad spend — not the revenue number your ad platform shows by default. Use this table as a quick reference, then calculate your exact floor with AOV and fixed costs.
Quick answer
Break-even ROAS = 1 ÷ gross margin (when there are no fixed costs per order)
- 50% margin → 2.00× break-even
- 40% margin → 2.50× break-even
- 25% margin → 4.00× break-even
Break-even ROAS table by gross margin
Assumes no fixed costs per order. Shipping, payment fees, and returns raise your real break-even ROAS above these figures — see the fixed-cost example below.
| Gross margin | Break-even ROAS | Profitable at 3×? | Calculator |
|---|---|---|---|
| 10% | 10.00× | No | Calculate |
| 15% | 6.67× | No | Calculate |
| 20% | 5.00× | No | Calculate |
| 25% | 4.00× | No | Calculate |
| 30% | 3.33× | No | Calculate |
| 35% | 2.86× | Yes | Calculate |
| 40% | 2.50× | Yes | Calculate |
| 45% | 2.22× | Yes | Calculate |
| 50% | 2.00× | Yes | Calculate |
| 55% | 1.82× | Yes | Calculate |
| 60% | 1.67× | Yes | Calculate |
| 65% | 1.54× | Yes | Calculate |
| 70% | 1.43× | Yes | Calculate |
| 75% | 1.33× | Yes | Calculate |
| 80% | 1.25× | Yes | Calculate |
What this table means
- Break-even means zero profit after product costs — not after ad spend efficiency alone.
- Higher margin lowers break-even ROAS. At 60% margin, break-even is about 1.67×; at 25%, it is 4×.
- Platform ROAS uses revenue. This table uses contribution margin — profit per sale before ads.
- Good ROAS is anything above your row — not a generic 3× or 4× target. See What Is a Good ROAS? for benchmarks with context.
Break-even ROAS formula
Break-even ROAS = AOV ÷ [(AOV × gross margin %) − fixed cost per order]
With no fixed costs, this simplifies to 1 ÷ margin. Example: $90 AOV, 50% margin, $6 fixed → contribution $39 → break-even ROAS 2.31× (not 2.0×). Full walkthrough in How to Calculate Break-even ROAS.
How fixed costs change break-even ROAS
Same economics at $100 AOV and 50% margin — only fixed cost per order changes:
| Fixed cost per order | Break-even ROAS |
|---|---|
| $0 | 2.00× |
| $5 | 2.22× |
| $10 | 2.50× |
| $15 | 2.86× |
Lead gen: same formula, different value
Use expected revenue per lead (customer value × close rate) as AOV. Conversion rate on the landing page does not change break-even ROAS — only margin and value per conversion matter. Model lead gen in the Break-even ROAS Calculator or Break-even Ads Calculator.
Setting Target ROAS from the table
- Find your gross margin row in the table above.
- Add a buffer above break-even (often 20–30%) for profit and variance.
- Set Google Ads Target ROAS from that floor — see Google Ads break-even ROAS and how to set tROAS from margin.
Frequently asked questions
What is break-even ROAS?
Break-even ROAS is the minimum return on ad spend where profit after product costs equals zero — your campaign stops losing money on margin, but earns nothing yet.
What is break-even ROAS at 50% margin?
At 50% gross margin with no fixed costs per order, break-even ROAS is 2.0×. Fixed costs like shipping raise that number.
Is 3× ROAS good?
Only if your break-even ROAS is at or below 3×. At 25% margin, break-even is 4× — so 3× still loses money. At 50% margin, 3× is profitable.
Does conversion rate affect break-even ROAS?
No. Break-even ROAS depends on margin and value per conversion (AOV or expected revenue per lead), not landing-page conversion rate.
Does Google Ads ROAS include COGS?
No. Platform ROAS is revenue divided by ad spend. Break-even ROAS must account for gross margin and per-order costs.
Reference this table
Break-even ROAS by margin table — Ad Breakeven (https://adbreakeven.com/break-even-roas-by-margin)