Dropshipping Break-even ROAS Calculator

Calculate the minimum Return on Ad Spend (ROAS) you need to achieve just to break even. This is the critical benchmark for your advertising campaigns.

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Results

Your Break-even Point

0.00x

This is the minimum ROAS you need to not lose money

Cost Breakdown

Total Non-Ad Costs: $0.00
Maximum Ad Spend to Break Even: $0.00

If your actual ROAS is higher than your break-even ROAS, you're making a profit. If it's lower, you're losing money on each sale.

Enter your details and click "Calculate" to see your break-even ROAS

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Dropshipping Break-even ROAS Calculator

What is ROAS and Break-even ROAS?

ROAS, or Return on Ad Spend, measures how much revenue you earn for every dollar you spend on ads. 

ROAS Fomula:

\( \displaystyle \mathrm{ROAS} = \frac{\text{Revenue}}{\text{Ad Spend}} \)

Example: If you spend $100 on ads and generate $400 in sales → ROAS = 400 ÷ 100 = 4. Higher ROAS → more profitable campaigns.

Calculate your ROAS.

Break-even ROAS tells you the minimum ROAS you need just to cover your product cost, shipping, and platform fees. If your ad campaigns deliver a ROAS below this number, you’re losing money. Anything above this number means you’re making a profit.

Break-even ROAS Fomula:

\( \displaystyle \text{Break-even ROAS} = \frac{\text{Selling Price}}{\text{Selling Price} - \text{Non-ad Costs}} \)

Example: Selling Price = $39.99, Non-ad Costs = $19.45 → Break-even ROAS ≈ 1.95. This means you need at least a 1.95 ROAS from ads just to break even.

FAQs

This tool calculates the minimum ROAS (Return on Ad Spend) you must achieve to avoid losing money.

It breaks down your non-ad costs (product cost, shipping, fees, misc expenses) and tells you the maximum ad spend you can afford before your product becomes unprofitable.

You only need a few basic numbers:

  • Selling price
  • Product cost
  • Shipping cost
  • Transaction fees
  • Miscellaneous costs

The calculator automatically determines how much of the selling price is left to spend on ads—and how much ROAS you must maintain.

  • ROAS tells you how your ads are performing.

  • Break-even ROAS tells you the minimum performance needed to not lose money.

If your ROAS is:

  • Below break-even ROAS → you're losing money

  • Equal to break-even ROAS → breaking even

  • Above break-even ROAS → profitable

This benchmark determines whether a campaign should scale or be cut.

It depends on your margins, but generally:

  • 1.0 ROAS → You only cover ad spend (not costs)

  • 1.5 – 2.0 ROAS → Often break-even range

  • 2.0 – 3.0 ROAS → Typically profitable

  • 4.0+ ROAS → Strong performance and scalable

Your real goal is always:
👉 A ROAS higher than your break-even ROAS. Calculate your ROAS.

Lowering your break-even ROAS makes it easier to run profitable ads.

Try these strategies:

  • Reduce product cost by switching or negotiating suppliers

  • Optimize shipping to lower fulfillment costs

  • Increase your selling price or adjust pricing psychology

  • Improve conversion rate to reduce ad waste

  • Add upsells / bundles to increase AOV

  • Reduce transaction fees (e.g., switch payment processors)

Even small improvements can significantly reduce your break-even ROAS.

Not yet.

You generally want a healthy buffer before scaling—ideally:
ROAS ≥ Break-even ROAS + 20–30% margin.
If you're just slightly above break-even, volatility can push the campaign into loss.

Because real stores have daily operational expenses, such as:

  • App subscriptions
  • Packaging
  • Virtual assistant fees
  • Fulfillment extras
    Including them gives you a more realistic break-even ROAS, not an inflated one.