Everyone quotes a target ROAS as if it were universal. It is not. The number you need is decided by your own margin, and once you know it you can tell in one glance whether a campaign is making money or quietly spending it.
Use the average order, not your best one. Everything here is what a single order costs you before you have spent anything on advertising it.
The two that people forget
Leave the profit margin at 0 and you get pure break-even. Put 15 in and you get the ROAS that leaves 15% of revenue as profit after the ads.
| AOV | Costs | Fees | Refunds | Margin | Break-even ROAS | Max cost per order |
|---|
Take the spend and revenue straight from the ad platform, then tell it your contribution margin. If you worked that out on the other tab it is already filled in.
Your numbers stay in this browser. Nothing is sent anywhere, and clearing the table removes them for good.
A 40% contribution margin means a break-even ROAS of 2.5. A 20% margin means 5.0. That is why a ROAS someone else calls excellent can be losing you money, and why a 2.0 can be perfectly healthy.
Watch for: borrowed benchmarks from a business with a different margin.
Payment fees, shipping and returns come out of the same margin the ads do. Leave them out and your break-even point looks lower than it is, which is exactly how an account stays unprofitable while the dashboard looks fine.
Best for: e-commerce, where all three are real.
If a customer orders again, you can afford to break even or lose money on the first sale and still win. That is a deliberate decision taken with a lifetime value number in hand, not a reason to stop measuring the first order.
Best for: subscriptions and consumables.
Send me the account and the margin you just worked out, and I’ll tell you honestly whether the spend, the targeting or the creative is what’s costing you.
Creative mind,
creative work.
