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Break-even ROAS and Target CPA

Work out the lowest ROAS and the highest cost per order your ads can afford before they lose money, from your selling price, GST, product cost, fees, shipping, packaging and returns. Add the profit you want to keep and get a target ROAS and target CPA, with the full per-order breakdown.

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About this tool

A 3× ROAS can be healthy for one business and a loss for another. What matters is how much of each order is left after product cost, taxes, fees, shipping and returns. That amount is the most you can spend on ads to win an order and still break even.

Enter your selling price including GST, the GST rate, product cost, payment or marketplace fee, shipping, packaging, other per-order costs and your return or RTO rate with the cost of each return. The calculator shows the contribution left per order, the break-even ROAS and CPA, and a target ROAS and CPA once you set the profit you want to keep as a share of the ex-GST price.

ROAS is calculated on the GST-inclusive price, which is how most ad platforms record purchase value when you send the order total; the ex-GST figure is shown too. Returned orders are assumed to bring the product back and refund the fee. Change the inputs if your returns work differently. The result is a planning number for one order, not a forecast of campaign results.

How to use it

  1. Choose your currency and enter the selling price including GST.
  2. Add product cost, fees, shipping, packaging and other per-order costs.
  3. Enter your return or RTO rate and the cost of each return.
  4. Set the profit you want to keep.
  5. Use the break-even and target numbers when setting bids and judging campaigns.

How it works

Contribution
What is left per order after GST, costs and returns.
Break-even ROAS
Price paid ÷ contribution: the lowest ROAS that does not lose money.
Break-even CPA
The most you can pay in ads for one order.
Target ROAS and CPA
After keeping the profit share you set.
Loss warning
Flags orders that lose money before any ad spend.

Formula and assumptionsPrice excl. GST = price ÷ (1 + GST rate). Fees = price × fee % + fixed fee. Revenue kept = price excl. GST × (1 − return rate). Costs = (product cost + fees) × (1 − return rate) + shipping + packaging + other + return cost × return rate. Contribution = revenue kept − costs = break-even CPA. Break-even ROAS = price incl. GST ÷ contribution. Target CPA = contribution − profit % × price excl. GST. Target ROAS = price incl. GST ÷ target CPA.

FAQ

Questions about this tool.

01 What is break-even ROAS?

The return on ad spend at which an order covers its product, tax, fees, shipping and returns but makes no profit. Below it, each ad-driven order loses money.

02 Should ROAS include GST?

Use the same basis as your ad platform. If you send the order total including GST as the conversion value, compare with the GST-inclusive break-even ROAS shown first. If you send values excluding GST, use the ex-GST figure.

03 How are returns and RTO handled?

A returned order brings no revenue but costs shipping, packaging and the return cost you enter. Product cost and the percentage fee are assumed recovered. Adjust the inputs if your marketplace keeps fees on returns.

04 Is a ROAS above break-even always good?

It means the first order covers its costs. Repeat purchases can justify spending more, and fixed costs such as salaries are not included here. Use the ROI, CAC and LTV calculator for the lifetime view.

05 Are my numbers saved?

Only in your own browser so they are there next time. Nothing is sent to Bargaon.

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