Advertising
Break-Even ROAS Calculator
The ROAS you actually need is 1 ÷ margin. At 30% that is 3.33x, not 2x.
Break-even ROAS is 1 ÷ margin
If a $100 sale leaves you $30 after the cost of goods, ads have to bring in more than $3.33 of revenue for every $1 spent before you make anything. That is 1 ÷ 0.30. Nothing about the ad platform changes it.
The common mistake is to aim at 2x because it sounds like doubling your money. At a 30% margin, 2x ROAS loses money on every sale — $100 of revenue for $50 of ads returns $30 of gross profit against $50 spent.
Margin means gross margin
Use the margin left after product cost, shipping and payment fees — before advertising. Putting net margin in here double-counts the ad spend and produces a target that is too low.
What it does not include
This is first-purchase break-even. If customers buy again, the ROAS you can afford on the first sale is lower, because the second order carries no acquisition cost. Repeat businesses often run first-purchase ROAS below break-even deliberately.
It also assumes the revenue figure your ad platform reports is real. Platform-attributed revenue is usually higher than what reaches your bank, so compare against your own numbers before trusting a target you have hit on paper.