ROAS Calculator
ROAS (Return on Ad Spend) tells you how much revenue you earn for every dollar of ads. Break-even ROAS tells you the minimum ROAS you need to not lose money.
For break-even ROAS, enter your gross margin:
What this means
Enter your numbers and click Calculate.
ROAS vs. Break-Even ROAS: The Number That Saves Dropshipping Stores
ROAS — Return on Ad Spend — is the metric every dropshipper watches, and almost every dropshipper misinterprets. The reason is simple: ROAS measures revenue, not profit. A 4× ROAS feels like success, but if your break-even ROAS is 4.5×, you just lost money "winning." The fix is to always read ROAS next to break-even ROAS, and that is exactly what this calculator does.
The Formulas
ROAS = Revenue From Ads ÷ Ad Spend
Break-Even ROAS = 1 ÷ Gross Margin (as a decimal)
Target ROAS = 1 ÷ (Gross Margin − Target Net Margin)
Net Profit = (Revenue × Gross Margin) − Ad Spend
Worked Example
You spend $500 on Facebook ads. They generate $1,800 in revenue. Your gross margin is 40%. You want a 15% net margin.
- ROAS = 1,800 ÷ 500 = 3.6×
- Break-even ROAS = 1 ÷ 0.40 = 2.50×
- Target ROAS = 1 ÷ (0.40 − 0.15) = 4.00×
- Gross profit = 1,800 × 0.40 = $720
- Net profit = 720 − 500 = $220
You are above break-even, so you are making money. But you are below your target ROAS of 4×, so you are not hitting your desired 15% net margin — you are at about 12%. To hit 15%, you need to either lower ad cost per sale, raise your price, or improve your gross margin.
Industry ROAS Benchmarks (2025)
| Channel | Median ROAS | "Good" ROAS |
|---|---|---|
| Google Ads (Shopping) | 2.5× | 4.0×+ |
| Meta (Facebook + Instagram) | 2.2× | 3.5×+ |
| TikTok Ads | 1.8× | 3.0×+ |
| Pinterest Ads | 2.0× | 3.2×+ |
| Email / SMS (retention) | 30× | 45×+ |
Remember that retention channels (email, SMS) blow acquisition channels out of the water on ROAS because the ad cost is near zero. Most profitable dropshipping stores make their real money on the second and third purchases, not the first.
Why iOS 14.5+ Makes ROAS Look Worse Than It Is
Since Apple's App Tracking Transparency rollout in 2021, attribution on iOS has degraded by roughly 20–30%. This means your ads manager reports a lower ROAS than you are actually achieving, because it cannot see every conversion. The implication: a 2.5× reported ROAS may correspond to a 3.0–3.3× true ROAS. This is why some experienced dropshippers add a 25% "attribution lift" when reading their dashboards — but be careful, this only applies if you are confident in your creative and offer.
When to Scale, When to Kill
A simple decision rule: if your 7-day rolling ROAS is more than 1.3× your break-even ROAS, scale slowly (20% budget increase per day). If it is between 1.0× and 1.3× break-even, hold and optimize creative. If it is below break-even for 5+ days, kill the ad set. Scaling losing campaigns is the #1 way new dropshippers burn through cash.