Break-even ROAS calculator
Break-even ROAS is your average order value divided by what one order actually leaves behind after cost of goods, shipping, payment fees and returns. Below that number, more orders means less money. Break-even POAS is 1.0 for every store, which is the point of it.
Free, no signup, nothing stored. The numbers live in the URL, so the result is shareable — and the page works with JavaScript switched off.
The answer
- Break-even ROAS
- 3.39
- Break-even POASThe same for every store, by definition
- 1.00
- ROAS for 15% net margin
- 6.88
- Most you can pay per orderAt break-even, then at your target margin
- €19.20 → €9.45
- Contribution per orderDelivered, then averaged over returns
- €21.87 → €19.20
Shareable result: https://www.magistry.io/tools/break-even-roas?aov=65&margin=45&shipping=5.5&fee=2.9&returns=8&returncost=6&target=15
How break-even ROAS is calculated
Break-even ROAS is average order value divided by the contribution one order leaves behind. The contribution is where the disagreements happen, so here it is in full.
contribution per delivered order = AOV × margin − shipping − AOV × fee rate
contribution per order placed = (1 − return rate) × contribution − return rate × (shipping + return cost)
break-even ROAS = AOV ÷ contribution per order placed
target ROAS = AOV ÷ (contribution per order placed − target margin × AOV)
Worked through with the example values on this page: a €65 order at 45% gross margin leaves €29.25 gross profit, minus €5.50 shipping and €1.89 in payment fees, which is €21.86 per delivered order. At an 8% return rate that becomes €20.12, minus €0.92 for the shipping and handling left behind by the 8% that come back — €19.20 per order placed. Break-even ROAS is 65 ÷ 19.20 = 3.39, and the most you can pay to acquire an order is €19.20.
The term most calculators leave out is the second half of the returns line. It is common to multiply contribution by (1 − return rate) and stop. But a returned order refunds the revenue and returns the goods while the outbound shipping stays spent and the return still costs something to process. Skipping that term understates break-even ROAS, which is precisely the error that leaves a campaign reading as profitable while the bank balance disagrees.
Why POAS makes break-even the same number for everyone
ROAS is revenue divided by ad spend. POAS — profit on ad spend — is gross profit divided by ad spend. Because the numerator is already profit, break-even POAS is 1.0 for every store, every product and every campaign. There is nothing to calculate and nothing to get wrong.
That also exposes what ROAS hides. At a ROAS of 4, a product on 70% margin and one on 20% margin look identical to the bidding algorithm, and they are not remotely the same business. Bidding on POAS ends that, but it requires sending profit rather than revenue as the conversion value — which means calculating gross profit per order in real time, per order, and passing it to the ad platforms through server-side events. The plumbing is the reason most stores still bid on ROAS despite agreeing with the argument.
Magistry computes profit per order from product cost, shipping, fees and refunds and sends that as the conversion value, which is the mechanism this page is describing. How the tracking works.
Questions about break-even ROAS and POAS
What is break-even ROAS?
Break-even ROAS is the return on ad spend at which an extra order stops adding profit and starts costing it. It is your average order value divided by the contribution one order leaves after cost of goods, shipping, payment fees and returns. If your contribution per order is €20 on a €65 order, break-even ROAS is 3.25 — below that, growth loses money.
How do you calculate break-even ROAS?
Take the contribution per delivered order: AOV × gross margin − shipping − AOV × payment-fee rate. Then adjust for returns: multiply that contribution by (1 − return rate), and subtract the return rate times (shipping + return handling cost), because a returned order refunds the revenue but leaves the outbound shipping and the handling cost behind. Break-even ROAS is AOV divided by the result.
Why is my break-even ROAS higher than my agency's number?
Almost always returns. Most break-even calculations multiply the contribution by (1 − return rate) and stop there, which ignores that you still paid to ship the order out and still pay to process it back. On an 8% return rate with €5.50 shipping and €6 handling, that second term is about €0.92 per order placed — small per order, and the difference between a campaign that reads as profitable and one that is.
What is POAS and how does it relate to ROAS?
POAS is profit on ad spend: gross profit divided by ad spend, where ROAS is revenue divided by ad spend. Break-even POAS is 1.0 by definition — at a POAS of 1 the campaign returns exactly what it costs. That is the appeal of the metric: the break-even point is the same number for every store, while break-even ROAS is different for every store and every product.
Should I bid on ROAS or POAS?
POAS, if you can. Bidding on ROAS treats a 70%-margin product and a 20%-margin product as equally valuable at the same revenue, which they are not. Bidding on POAS requires sending profit rather than revenue as the conversion value, which means calculating gross profit per order in real time and passing it to the ad platforms through server-side events. That plumbing is the reason most stores still bid on ROAS.
Does this calculator store what I type?
No. Everything is computed on the server from the values in the URL and nothing is written down. The numbers are in the address bar, which is also how you share a result — copy the URL and the person who opens it sees the same calculation.
What this calculator assumes
It is a single-order, contribution-margin model. It assumes every acquired order is a first order, so it ignores repeat purchases and lifetime value entirely — which makes it conservative for a store with strong retention and roughly right for one without. It also treats fixed costs as out of scope: what it answers is “does the next order pay for itself”, not “is the business profitable”.
Gross margin is applied to average order value, so a store with a wide margin spread across products gets a blended answer. If your catalogue mixes 20% and 70% margins, run it twice with each figure rather than averaging them — the two answers are further apart than the average suggests.
Last reviewed 3 August 2026. Nothing you type is stored; the values live in the URL. Found an error in the model? Mail hello@magistry.io.