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Google Ads breakeven ROAS calculator

Enter two numbers and see the most you can pay for a customer. Already running ads? Add two more and see whether you are profitable or losing money.

Currency
1

What does a customer pay per order?

Run this per group of similarly priced products. If you sell a $20 item and a $500 item, the average describes an order that does not exist.

2

How much of that order do you keep?

Not sure about your margin? Work it out here

Your net margin: –
A rough number. It does not include return shipping or restocking.

Profit per order
–
The most you can pay for a customer
–
Breakeven CPA. Above this, every order loses money.
Your red line
–
Breakeven ROAS. Below this ROAS, ads lose money.
3

Already spending on ads?optional

Use last month's numbers from Google Ads or Meta.

you: red line: safe zone:

4

The plan: what to aim for

Target ROAS
–
Red line × 1.4. Leaves 40% room for seasons, pricier clicks and mistakes.
Target cost per customer
–
Target CPA. This is the goal you set in campaigns.
Minimum monthly budget
–
Target CPA × 30. Enough for Google to learn from 30 purchases a month.
What a customer is worth per year
–
Potential, not budget. Start by planning on the first purchase.

Your three numbers

Target CPA
–
Red line (breakeven ROAS)
–
Target ROAS
–

Write them down. You need them for every campaign decision.

Why a 3x ROAS is not always good

A skincare store owner was looking at a 3x ROAS and thought business was great. Once product cost, returns and shipping were counted, breakeven was 3.8x. Three months of “growth” had been three months in the red, while the report looked fine.

Three things ROAS does not tell you

ROAS is not profit.3x sounds strong. With a 30% margin your red line is 3.33x, so every sale loses money.
Blended ROAS hides the truth.Brand campaigns lift the average. Other campaigns can lose money while the total looks fine.
The gap matters, not the number.The goal is not a high ROAS. The goal is staying above your red line with room to grow.

Breakeven ROAS and CPA: common questions

What is breakeven ROAS?

Breakeven ROAS is the lowest return on ad spend where you do not lose money. Below that line every order from Google Ads costs you more than it brings in. Above it, your ads start making a profit.

How do you calculate breakeven ROAS?

The formula is 1 divided by your margin. If you keep 25% of each sale after product cost, shipping, payment fees and returns, your breakeven ROAS is 1 / 0.25 = 4. For every dollar spent on ads you need at least 4 dollars in revenue.

What is a good ROAS for an ecommerce store?

There is no single number. A good ROAS is one above your breakeven ROAS, and that depends on margin. With a 50% margin a ROAS of 3 is great. With a 20% margin the same ROAS of 3 loses money. That is why the calculator also gives a target ROAS, 40% above breakeven, so you have room when click costs rise.

What is breakeven CPA vs target CPA?

Breakeven CPA is the most you can pay for one order from ads without losing money. It equals your profit per order (average order value × margin). Target CPA is breakeven CPA divided by 1.4. That is the cost per customer where ads actually make money, and the number you can set as a target in Google Ads.

How do I calculate my margin for this calculator?

Take your selling price and subtract product cost, the shipping you pay, payment fees and your average cost of returns. Divide what is left by the selling price. The calculator has a "Not sure about your margin?" helper that does this for you.

How much budget do I need for Google Ads?

The calculator suggests at least 30 orders a month at your target CPA. That is roughly the data Google's smart bidding needs to learn who to show your ads to. A smaller budget can work, but learning takes longer and results swing more.

Why does Google Ads show a good ROAS but I am not making money?

Because ROAS only looks at revenue, not product cost, shipping or returns. A ROAS of 3 looks fine in a report, but if your breakeven ROAS is 4 you lose money on every order. The other common reason is bad tracking: conversions counted twice, or sales credited to ads that did not come from ads.

What is the difference between ROAS and POAS?

ROAS is revenue divided by ad spend. POAS is profit divided by ad spend. A POAS above 1 means you are profitable. This calculator gets to the same answer from the other side: it uses your margin to turn your ROAS into a yes or no on profit.

Numbers came back red or yellow?

That is not bad luck, it is account structure. Let's open the account together and see where the money goes.

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This calculator gives an estimate based on the numbers you enter. It is not financial advice. Talk to your accountant for the full picture.