What is break-even ROAS?
ROAS (return on ad spend) is the sales your ads bring in divided by what you spent. A ROAS of 3x means every $1 of ads brought in $3 of sales. Break-even ROAS is the point where those sales cover the ad spend and every cost of fulfilling the order, so you neither make nor lose money.
Break-even ROAS = order value ÷ profit per order before ads
Max cost per sale = profit per order before ads
Anything above your break-even ROAS is profit. Anything below it means each sale costs you money, however good the ROAS looks in Ads Manager.
Why GST quietly raises your break-even
Meta and Google usually report ROAS using the full amount the customer paid, including GST. But one-eleventh of that goes to the ATO, not to you. On a $110 order, only $100 is yours to cover costs and ads.
That's why a store can show a "healthy" 2.5x ROAS in Ads Manager and still be losing money. This calculator removes GST before working out your profit, so the break-even number is one you can trust.
Turning the numbers into ad decisions
Set a target, not just a floor
Break-even keeps you afloat but doesn't grow the business. Use the target ROAS (for the profit percentage you want) as your benchmark when judging campaigns.
Judge campaigns over enough time
Daily ROAS swings a lot. Look at 7 to 14 days before pausing or scaling, especially on smaller budgets.
Account for repeat customers carefully
If customers reliably buy again, you can accept a lower ROAS on the first order. Only count repeat orders you can see in your store data, not hopes.
Fix margin before chasing ROAS
A higher order value (bundles, free-shipping thresholds) or lower fulfilment costs drop your break-even ROAS instantly. It's often easier than squeezing more from the ads.