The break-even ROAS is 2Γ before fixed overhead and tax.
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Break-even ROAS Calculator
Turn contribution margin into a break-even advertising target before evaluating campaign ROAS.
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No account. Formula and assumptions are shown below.
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Break-even ROAS details
Formula & disclaimer
Break-even ROAS = 1 Γ· (Gross Margin Rate β Transaction Fee Rate β Other Variable Cost Rate)
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How to read this result
Three useful checks, kept deliberately short.
55% gross margin with 3% transaction fees and 2% other variable costs: Subtract non-ad variable costs from gross margin Β· Convert the remaining 50% contribution into a decimal Β· Divide one by the contribution rate.
Fixed overhead, returns, tax and attribution loss can require a higher commercial target.
Formula and assumptions
Break-even ROAS = 1 Γ· (Gross Margin Rate β Transaction Fee Rate β Other Variable Cost Rate)ROAS below the calculated threshold does not cover the entered variable costs.
Keep in mind: Use consistent revenue attribution and include every material variable cost before setting an advertising target.
