How to use
- Enter the selling price and all variable costs per order.
- Read the break-even ROAS and the maximum CPA.
- Add a target profit margin to get the target ROAS.
Worked example
Price $100 with $45 product cost, a 5% fee ($5), $8 shipping and $2 other costs leaves $40 contribution (40%), so break-even ROAS is 2.50 and maximum CPA is $40. A 10% target margin needs ROAS 3.33 (CPA $30).
Supported formats and limits
| Input | Price, costs, fees, target margin |
|---|---|
| Output | Break-even ROAS, target ROAS, max CPA |
| Engine | Break-even ROAS = 1 ÷ contribution margin |
Limitations
- Fixed costs (salaries, rent) are not included; see the business break-even calculator.
- Percentage fees are charged on the selling price you enter. There is no tax field, so enter a price without sales tax or VAT.
Questions
Which costs should I include?
Every cost that comes with one more order: landed product cost, payment and platform fees (as a percentage of price and a fixed amount), shipping and other variable costs such as packaging or handling. Leave out fixed costs such as rent and salaries; this model does not spread them over orders.
How is break-even ROAS calculated?
Contribution = price minus all entered costs, and break-even ROAS = price ÷ contribution. With a price of 100 and 60 of included costs, contribution is 40 and break-even ROAS is 100 ÷ 40 = 2.50. If costs use up the whole price, there is no break-even ROAS.
What does the target profit margin do?
It reserves that share of the price as profit after ads. Target CPA = contribution minus price × margin, and target ROAS = price ÷ target CPA. At a 10% margin in the example above, CPA is 30 and target ROAS is 3.33.
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