The ROAS at which a sale produces zero contribution margin, from your margin rate. Runs in your browser; nothing you type is sent anywhere.

Contribution margin before marketing (%)

Formula

Breakeven ROAS equals one divided by the contribution margin rate before marketing. A product with 40 percent margin after cost of goods, shipping, and payment fees breaks even at 2.5x; at 60 percent margin, 1.67x; at 25 percent margin, 4x. Any ROAS below breakeven loses money on the first order.

Include every variable cost in the margin, and decide whether returns and repeat purchases belong in the calculation. Advertisers who accept below-breakeven ROAS on first purchase are betting on lifetime value and should know their payback period.

Typical ranges are on the benchmarks pages; definitions in the glossary.