E-Commerce ROAS & Break-Even Margin Calculator
Determine your break-even ROAS, maximum target CAC, net profit margin, and non-ad unit costs across Meta, Google, and Amazon ad campaigns.
How to Use the E-Commerce ROAS & Break-Even Margin Calculator
- Input your parameters in the fields or drag the interactive sliders.
- The algorithm updates the primary metric and schedules in real-time.
- Click “Copy Result” to copy structured values to your clipboard.
Calculation Formula
- Gross Revenue: Orders × [Unit Selling Price × (1 - Discount %)]
- Net Revenue: Gross Revenue × (1 - Returns & Refunds %)
- Non-Ad Variable Costs: COGS + Shipping + Packaging + Marketplace Fees + Gateway Fees + Other Variable Costs
- Contribution Before Ads: Net Revenue - Non-Ad Variable Costs
- Contribution Margin %: (Contribution Before Ads / Net Revenue) × 100
- Net Profit: Contribution Before Ads - Ad Spend - Fixed Overheads
Example Calculation
100 delivered units sold at ₹1,499 with ₹400 COGS, ₹90 Shipping, ₹30 Packaging, 5% Marketplace Fee, 2% Gateway Fee, 10% Returns, ₹10,000 Overheads, and ₹25,000 Ad Spend
Gross revenue of ₹1,49,900 yields ₹1,34,910 net revenue after 10% returns. After non-ad variable costs (₹61,443.70), contribution before ads is ₹73,466.30. Break-even ROAS is ₹1,49,900 / ₹73,466.30 = 2.04x. Against a 6.00x actual ROAS and ₹25,000 ad spend, net profit reaches ₹38,466.30 with a maximum allowable CAC of ₹634.66.
Important Assumptions
- Break-even ROAS is defined as Gross Revenue / Contribution Before Ads.
- Contribution Before Ads accounts for product costs, shipping, packaging, returns allowance, and merchant fees.
Frequently Asked Questions
What is Break-Even ROAS?
Break-even ROAS is the minimum Return on Ad Spend required so that total revenue covers product cost, shipping, payment fees, returns, and marketing spend without losing money.
What is Maximum Target CAC?
Maximum CAC is the absolute highest dollar/rupee amount you can spend to acquire a single paying customer without making an operating loss.