Draper Digital

Plan / Free PPC tool

Break-even ROAS calculator

Work out how much you can afford to spend on a sale. Use your margin and costs to find a break-even ROAS, then add a profit target to set a more useful CPA ceiling.

Your inputs

Example values

Change the example figures to use your own. Values stay in this browser tab.

Use net revenue after discounts, refunds and any tax you pass on.

After product costs, before the other costs entered below.

For example delivery, payment fees and returns. Do not count costs twice.

Contribution you want left after ads, as a percentage of order revenue.

Your results

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Free to use. No signup. Inputs are processed in your browser and are not sent to Draper Digital.

Understand the numbers

How to use this calculator

Use contribution margin, not just revenue

A campaign can generate impressive revenue and still lose money. This calculator starts with what remains after the costs of fulfilling an order. Enter costs on the same tax basis as revenue and use a realistic allowance for refunds and returns.

Set targets with room for the business

The break-even result covers the variable costs entered here and advertising. It excludes fixed overheads, agency fees, tax and any costs you have not included. The target margin is contribution after ads, not audited net profit. Build in enough headroom for those remaining costs.

A worked example

A £100 order at a 60% gross margin, with £10 of other variable costs, leaves £50 for advertising. Break-even ROAS is 2×. Keeping £10 per order after ads lowers target CPA to £40 and raises target ROAS to 2.5×.

A little more context

Common questions

Can I use a 40% margin directly?

If that 40% already includes every variable cost, enter 40 as gross margin and zero for other variable costs. Counting the same costs twice would make the target unnecessarily high.

Does this include lifetime value?

No. It uses a single order. Only substitute a lifetime value when you have reliable retention and contribution data for the same customer cohort.

Why can the profit target be too high?

If the target consumes all contribution, nothing remains to buy traffic. Improve the economics or lower the target rather than using a negative advertising budget.

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