Free tool
ROAS & break-even ROAS calculator.
Free for ecommerce — enter your ad spend, revenue and gross margin to instantly see your ROAS, ACOS, break-even ROAS (BEROAS) and real profit after ad spend.
Your numbers
Enter a period's ad spend, the revenue it generated, and your gross margin.
Results
What is ROAS?
ROAS (Return On Ad Spend) is revenue divided by ad spend. A 4.00x ROAS means every Rs 1 (or $1) you spent on ads returned Rs 4 in revenue. It's a revenue ratio — on its own it says nothing about profit. For that, you need your break-even ROAS.
What is break-even ROAS (BEROAS)?
Break-even ROAS — often shortened to BEROAS — is the ROAS at which ad revenue exactly covers your product cost and your ad spend. The formula is simple:
Break-even ROAS = 1 ÷ gross margin
Anything above your BEROAS is profit; anything below is a loss. Here's what break-even ROAS looks like at common margins:
| Gross margin | Break-even ROAS |
|---|---|
| 20% | 5.0x |
| 25% | 4.0x |
| 30% | 3.3x |
| 40% | 2.5x |
| 50% | 2.0x |
| 60% | 1.7x |
What is ACOS, and how does it relate to ROAS?
ACOS (Advertising Cost of Sale) is the inverse of ROAS: ACOS = ad spend ÷ revenue = 1 ÷ ROAS. A 25% ACOS is the same as a 4.0x ROAS; a 50% ACOS is a 2.0x ROAS. The calculator above shows both so you can read whichever your platform reports.
Why "real" ROAS matters in ecommerce
Platform-reported ROAS ignores returns. In a cash-on-delivery market like Pakistan, refused orders (RTO) don't count as revenue — so your real ROAS is lower than the dashboard says. Subtract your return rate before you decide a campaign is winning. (More on this in what is a good ROAS and how to reduce RTO.)
How to lower your break-even ROAS
You don't only win by raising ROAS — you win by lowering the ROAS you need. Increase your gross margin or your average order value and your break-even ROAS drops, so the same campaigns turn profitable.
FAQ
What is ROAS?
ROAS (Return On Ad Spend) is revenue generated divided by ad spend. A 4.00x ROAS means every Rs 1 (or $1) of ad spend returned Rs 4 in revenue.
What is break-even ROAS (BEROAS)?
Break-even ROAS, or BEROAS, is the ROAS at which ad revenue exactly covers product cost and ad spend. BEROAS = 1 ÷ gross margin. At a 40% margin your break-even ROAS is 2.5x, so you profit above 2.5x.
What is a good ROAS?
A good ROAS is any ROAS comfortably above your break-even ROAS, with cushion for returns and overheads. A 4x ROAS can lose money at a low margin while a 2x ROAS profits at a high margin — your margin decides your target.
What is ACOS, and how does it relate to ROAS?
ACOS (Advertising Cost of Sale) is ad spend ÷ revenue — the inverse of ROAS. ACOS = 1 ÷ ROAS. A 25% ACOS is the same as a 4.0x ROAS; a 50% ACOS is a 2.0x ROAS.
How do I lower my break-even ROAS?
Raise your gross margin (better pricing, lower COGS) or your average order value — both reduce the ROAS you need to break even, so campaigns turn profitable sooner.
Want us to beat your current ROAS? Book a free strategy call — TwinEcom scales ecommerce stores on profit, not vanity ROAS.