Method and assumptions
Break-even is not always a suitable campaign target. This calculator reserves a chosen profit margin before determining how much an order can spend on acquisition.
Maximum ad cost = revenue - non-ad variable costs - desired profit. Target ROAS = revenue / maximum ad cost.
Worked scenario
Enter order revenue and every non-ad variable cost, then reserve the desired profit amount or margin. The residual is maximum acquisition cost. Compare target ROAS with break-even ROAS to make the safety buffer explicit instead of selecting a target from an industry benchmark.
How to interpret the result
A target is only achievable if the traffic and conversion economics can support it at useful volume. Raising target ROAS can reduce spend and sales rather than improve profit. Evaluate the profit curve across several targets, and separate new-customer investment when repeat contribution is supported by cohort evidence.
Input reference
- Currency
- Example default: USD
- Average order revenue
- Example default: 80
- Product cost
- Example default: 25
- Shipping and fulfillment
- Example default: 8
- Platform and payment fee rate
- Example default: 8%
- Other variable cost
- Example default: 2
- Desired margin after ads
- Example default: 15%
Common mistakes
- Selecting a target without product-level variable cost.
- Assuming a higher ROAS target always produces more profit.
- Using expected repeat value without cohort evidence.
Before using the result
- Reserve the desired contribution before calculating ad allowance.
- Test multiple targets against expected volume.
- Review actual contribution after returns mature.
Questions to check before deciding
How is this different from break-even ROAS?
It reserves a desired profit margin; break-even ROAS allows profit to fall to zero.
Can the target CPA be negative?
A negative result means non-ad costs already exceed revenue after the desired profit reserve.
Independent calculator. Not affiliated with or endorsed by the platforms mentioned.