Calculator

Break-even ROAS calculator

Find the lowest ROAS an ad sale can run at without losing money, from your price and costs or straight from your profit margin.

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Enter your selling price and what one unit costs you, Amazon fees included.

Selling price ($)Product cost, COGS ($)Amazon fees ($)Referral fee plus, with FBA, the fulfillment fee for one unit. Amazon's Revenue Calculator in Seller Central shows both for any ASIN.Other costs ($)

Your ROAS (optional)Ad sales divided by ad spend, to compare with break-even.

Break-even ROAS

2.61

Your ROAS of 3.00 is above break-even. Ads cost 33.33% of each ad sale, leaving about 5.00% of the sale as profit.

Break-even ACoS: 38.33%
Margin before ads: 38.33%
Profit per unit before ads: $11.50

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Set your target from your break-even. Merch Jar's bid rules work from a target ACoS, which is 100 divided by your target ROAS: a ROAS of 4 is an ACoS of 25%.

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What is break-even ROAS?

1Break-even ROAS is the return on ad spend where an ad sale makes exactly nothing: the ad cost uses up all the profit on the sale. To find it, start with what one unit leaves you before ads. A $30.00 product that costs $8.00, with $9.50 in Amazon fees and $1.00 in other costs, leaves $11.50.
2Divide the selling price by that profit. $30.00 divided by $11.50 is a break-even ROAS of 2.61, so every $1 of ad spend has to bring in at least $2.61 of sales.
3Compare your own ROAS with it. Above break-even, each ad sale leaves you money. Below it, each one loses money.

FAQ

Break-even ROAS from your margin

If you already know your margin before ad spend, break-even ROAS is 1 divided by that margin. A 40% margin breaks even at a ROAS of 2.5, a 25% margin at 4, and a 20% margin at 5.

The thinner the margin, the higher the ROAS your ads need. At a 10% margin, anything under a ROAS of 10 loses money.

Break-even ROAS and break-even ACoS

ROAS and ACoS are the same two numbers, ad spend and ad sales, divided the other way round. ROAS is sales over spend, ACoS is spend over sales as a percentage, so ROAS = 1 ÷ ACoS and ACoS = 100 ÷ ROAS. A break-even ROAS of 2.61 is a break-even ACoS of 38.33%.

Amazon shows both in its reports, so use whichever you think in. Just keep the direction straight: higher ROAS is better and higher ACoS is worse, so a target ROAS sits above break-even and a target ACoS sits below it. The breakeven ACoS calculator does this sum as an ACoS, and the ACoS to ROAS calculator converts any value.

What to count in your costs

Count everything one unit costs you except advertising: product cost, Amazon's referral fee, the FBA fulfillment fee if you use it, and per-unit extras like inbound shipping and packaging. Leave ad spend out, because that is what the break-even is for.

To see the whole picture, with total sales, ad sales and ad spend for a month, the Amazon profit calculator shows your profit after ads and where your ROAS, ACoS and TACoS sit against break-even.