Marketing & ROI
ROAS Calculator
Calculate return on ad spend for any campaign — and add your gross margin to instantly see profitability and the break-even ROAS you need to target.
Gross margin after product costs, before ad spend.
🔒 All calculations happen instantly in your browser. No data is sent to any server.
How the calculation works
ROAS = Revenue from Ads ÷ Ad Spend
Break-Even ROAS = 1 ÷ Gross Margin (as decimal) = 100 ÷ Margin%
Profit = Revenue × Gross Margin% − Ad Spend
Example: Revenue $20,000 · Ad Spend $5,000 · Gross Margin 30%
ROAS = 20,000 ÷ 5,000 = 4.0 · Break-even = 100 ÷ 30 = 3.33 · Profit = $6,000 − $5,000 = $1,000
Frequently Asked Questions
- Break-even ROAS depends on your gross margin. At 25% margin: break-even = 4.0. At 33% margin: break-even = 3.0. At 50% margin: break-even = 2.0. A 'good' ROAS is anything comfortably above your break-even — typically 4:1 to 8:1 for e-commerce.
- ROAS measures gross revenue per ad dollar spent — it ignores all other costs. ROI measures net profit relative to total investment. A 4:1 ROAS sounds impressive but may be unprofitable if COGS is 70%. Always check ROAS against your break-even before judging campaign performance.
- Break-even ROAS = 1 ÷ Gross Margin. At 25% gross margin: 1 ÷ 0.25 = 4.0. This means you need $4 in revenue for every $1 in ad spend just to cover the cost of goods and ads. Any ROAS above this is profitable.
- ROAS only accounts for ad spend versus revenue. It ignores COGS, fulfilment, customer service, returns, overheads, and other expenses. A 5:1 ROAS at 15% gross margin only returns $0.75 revenue after COGS per $1 of ad spend — still a loss after factoring in other costs.
- Ad platforms report 'Purchase ROAS' = Purchase conversion value ÷ Amount spent, measured by their pixel/conversion tracking. Attribution window differences (1-day vs. 7-day click) and data discrepancies between platforms and your actual revenue data are common, so always reconcile with backend sales.