Break-Even ROAS Calculator
As a marketer or business owner, it is incredibly important to know your KPI’s. One very important KPI in the e-commerce marketing world is your Break-Even Return On Ad Spend, or Break-Even ROAS. This is important for one main reason: It tells you exactly how many dollars your ads need to generate in order to pay for the products/services that they are selling.
For example: If you were to sell a $100 product using $80 worth of ads, that only leaves you with $20 left…and if the product costs more than $20 to produce - you’re losing money!
Use our simple calculator below to determine what your Break-Even ROAS is. All you need to know is your profit margin, and the calculator will handle the rest. :)
Another way to think of it is “How many dollars of revenue does each single dollar of advertising need to generate?” Keep in mind though - this doesn’t tell the FULL story. In order to calculate how profitable your marketing truly is, you need to factor in additional costs, such as the salary you pay your marketing person, or the agency fees you pay your marketing agency to handle your ads.
⚠️ An Important Caveat:
Sorry to burst your bubble…but ROAS isn’t all its cracked up to be. Sure, its a good measure of marketing success within an ad account - but we’ve seen too many brands with absolutely, absurdly high ROAS - and they’re still having serious money issues. Making decisions based on ROAS alone can be a recipe for disaster.
Thats why at upGrowth Commerce, we take a much more nuanced approach. We seek to truly understand all the important financial metrics of a brand, far beyond just ROAS.
Curious what that looks like? Download our resource here: