What Is Break-Even ROAS?
The definition, the formula and how each cost line changes the number you have to beat.
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Guides
Ecommerce unit economics, in plain language
The calculators give you a number. These guides give you the reasoning behind it, so the number means something when you act on it. Every example is computed with the same engine the tools use.
Advertising Profitability
How paid acquisition interacts with margin: what you have to earn back, what you can afford to pay, and where the line between the two sits.
Break-Even ROAS vs Target ROAS
One number keeps you from losing money, the other earns you some. Where each belongs.
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How to Calculate Your Maximum CPA
The acquisition ceiling in currency rather than as a ratio — and why buyers often prefer it.
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Ecommerce Profitability
How order revenue turns into contribution and net profit after fulfilment, fees, acquisition and the other variable costs that grow with sales.
How to Calculate Ecommerce Profit
The full per-order cost stack, the order of subtraction and the difference between contribution and net profit.
Last reviewed
Start here: the four numbers that decide everything
Almost every question about whether a store works comes down to four figures, in this order.
- Order value. What a customer pays. Not your list price — your average order value, after discounts, because that is what actually arrives.
- Variable cost per order. Everything that only exists because that order exists: goods, shipping you pay for, payment and platform percentages, packaging.
- Contribution. The first minus the second. It is the only money available to pay for advertising, and then for overheads, and then for profit.
- Fixed costs. What you owe every month regardless of sales. Divide them by contribution per order and you have the volume where the business itself breaks even.
Margin is not profit
A 60% margin sounds healthy until you notice it is a gross margin — computed before shipping, fees and advertising. Two stores can both report 60% and have opposite outcomes, because one ships a 200-gram item domestically and the other ships a 12-kilo item across a border.
The habit worth building is naming which margin you mean every time: gross margin, contribution margin, or net profit. Most disagreements about whether a product is working are really disagreements about which of the three is being quoted.
Why ad targets should be derived, not chosen
A ROAS target picked because it sounds right has no relationship to your costs. Derive it instead: contribution per order sets the ceiling on what you can pay for an order, and that ceiling converts directly into both a maximum CPA and a minimum ROAS. Work yours out with the Break-Even ROAS Calculator.
More guides in development
These are being written to the same standard, with worked examples you can reproduce. They are listed without links because the pages do not exist yet.
- Contribution margin explained, with a full worked order
- Blended vs platform-reported ROAS, and why they disagree
- Pricing from a margin target instead of a markup
- Modelling refunds and returns in unit economics
Every guide follows the same rules as the tools — see the methodology.