DTC tools

Break-Even ROAS Calculator

Enter your unit economics and see the exact ROAS you need to break even, the most you can pay to acquire a customer, and whether your current spend is actually profitable.

Your numbers

Three quick inputs. Adjust anything and the results update live.

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Results

Break-even ROAS · first order—xThe revenue you need for every $1 of ad spend, just to break even.
Break-even CAC
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Most you can pay per customer, first order
Contribution margin
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Left per order to cover ad spend
Contribution / order
—
Dollars after variable costs

Know your allowable CAC? The next question is whether your store converts the traffic you're paying for.

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Break-even ROAS, explained

The ROAS your ad platform reports measures revenue against spend. Break-even ROAS measures profit. A store can post a healthy reported number and still lose money on every order, because reported ROAS ignores what each order actually costs to fulfill. Break-even ROAS is the point where advertising exactly pays for itself, with no profit and no loss. It is the inverse of your contribution margin: if 40% of each order is left after product, shipping, fulfillment, fees, discounts, and returns, your break-even ROAS is 1 ÷ 0.40 = 2.5x. Below it you lose money on every order you acquire; above it you make money.

The first-order ROAS trap

First-order break-even ROAS assumes a customer buys once and never comes back. For most DTC and CPG brands that is too harsh, because repeat purchases add contribution you already paid to acquire. Enter your 90-day repeat revenue and the calculator drops your break-even ROAS, because you can afford a higher acquisition cost when a customer is worth more than one order. The trap runs the other way too: a brand with no repeat purchase cannot hide a weak first-order margin behind a hoped-for LTV.

The math behind the numbers

Contribution per order is your AOV minus product cost, shipping, fulfillment, payment fees, discounts, and returns. Contribution margin is that figure divided by AOV. Break-even ROAS is AOV divided by contribution per order, and break-even CAC is the contribution itself, the most you can spend to acquire a customer and still break even on the first order. With repeat revenue entered, allowable CAC grows by the contribution on that repeat revenue, which lowers the ROAS you need.

FAQ

Everything you need to know.

What is a good ROAS for a DTC brand?
There is no universal number, because a good ROAS is any figure above your break-even ROAS. A brand with a 30% contribution margin needs to clear about 3.3x just to break even, while a brand at 60% margin breaks even near 1.7x. Calculate your own break-even first, then set a target above it that leaves the profit you need.
How do I calculate break-even ROAS?
Divide your average order value by your contribution per order, or equivalently divide 1 by your contribution margin. If 40% of each order is left after all variable costs, your break-even ROAS is 2.5x. This calculator does it for you once you enter your AOV and costs.
What is the difference between break-even ROAS and break-even CAC?
Break-even ROAS is a ratio of revenue to ad spend; break-even CAC is a dollar amount, the most you can pay to acquire one customer. They describe the same limit from two angles: break-even CAC equals your contribution per order, and break-even ROAS equals AOV divided by that contribution.
Should I include repeat purchases in my ROAS target?
Yes, if you have reliable repeat-purchase data. Factoring in 90-day or lifetime repeat revenue raises your allowable CAC and lowers your break-even ROAS, which is why brands with strong retention can outbid competitors on ads. Only use repeat numbers you can actually defend.
What is the difference between ROAS, ROI, CPA, and MER?
ROAS is revenue divided by ad spend for a campaign or channel. ROI is broader, measuring profit against total investment. CPA is the cost to acquire one customer, and ignores the revenue they bring. MER, or marketing efficiency ratio, is total revenue divided by total marketing spend across every channel, which is why many DTC operators trust it more than the platform-reported ROAS each channel claims for itself. Break-even ROAS ties these together: it is the revenue-to-spend ratio where profit is exactly zero, so any ROAS above it is real profit.
Built by Liquid Lemon, a Shopify design studio and DTC growth agency for consumer brands.
Planning model. Results are estimates based on the figures you enter, not a guarantee of performance.