How to use the break-even ROAS calculator
Break-even ROAS is the point where advertising just pays for itself: 1 ÷ margin on price. A 40% margin needs a 250% ROAS, because every $250 of revenue leaves $100 of margin, which is exactly the $100 of ad spend that produced it.
The usual mistake is mixing margin with markup. Margin divides by the selling price; markup divides by cost. An item costing $60 and selling for $100 carries a 40% margin but roughly a 67% markup. Choose markup as the input basis and the tool shows the converted margin on price and uses that converted figure for break-even ROAS.
Break-even ad cost share is the same relationship inverted: the share of revenue advertising can absorb is simply the margin. Enter an expected revenue figure and that ceiling is restated as an amount.
Enter your actual ROAS and the tool reports the distance from break-even in percentage points. Use the revenue-based ROAS from the ROAS calculator, and keep the margin identical in both tools so the two results agree. Remember this break-even covers ad spend only, not fixed costs.
Frequently asked questions
Margin measures profit against the selling price; markup measures it against cost. An item sold at a 100% markup carries a 50% margin. Break-even ROAS has to use the margin on price.
Only against ad spend. Payroll, fixed costs and platform fees are not included, so subtract those before calling the account profitable.