How is ROAS different from ROI?

ROAS is revenue divided by ad spend and only looks at revenue. ROI is profit divided by investment and subtracts costs. A ROAS of 4 means every 1 spent returned 4 in revenue — but at a 20% margin that 4 produces only 0.8 in gross profit, so after the 1 of ad spend the campaign lost 0.2. That is why this tool insists on a margin figure.

How is break-even ROAS calculated?

It is 1 divided by the gross margin. A 50% margin needs a ROAS of 2 to break even, 25% needs 4, and 20% needs 5. The lower the margin, the more the advertising has to deliver, which is why low-margin products struggle to grow on paid traffic.

BUSINESS AND COMMERCE · CALCULATED IN YOUR BROWSER

ROAS Calculator

Work out return on ad spend and the break-even ROAS that actually pays for itself.

Prepare your figuresAd spend, revenue, margin, other costs

Review the estimateROAS / Break-even / Net profit

Input

Ad spend

Revenue

Product gross margin

Other costs

Results

VerdictCurrently profitableROAS 3.6× · Break-even ROAS 2.857×

ROAS3.6×

Break-even ROAS2.857×

Gross profit63,000.00

Net profit13,000.00

Return on ad investment26%

No currency is assumed — enter every amount in the same one. Results are estimates and are not a marketplace statement or a tax conclusion.

About this tool

Enter ad spend and the revenue it produced to get ROAS — but the number this tool is really about is the **break-even ROAS**. A ROAS of 3 sounds healthy, yet at a 25% gross margin you need a ROAS of 4 just to break even, so that healthy-looking campaign is losing money. Enter your gross margin and the tool works out the threshold, the actual net profit, and states plainly whether you are ahead or behind.

How it works

Enter ad spend and the revenue the campaign produced.
Enter the product gross margin — before advertising, not net.
Read the ROAS, the break-even ROAS, and the actual net profit.

Assumptions and limits

ROAS looks at revenue only. Whether a campaign makes money depends on gross margin, so the break-even ROAS is calculated alongside it.

Privacy

Costs, revenue, and campaign figures are calculated only inside this browser. Nothing is uploaded, stored, or written to the URL or any log.

Frequently asked questions

How is ROAS different from ROI?: ROAS is revenue divided by ad spend and only looks at revenue. ROI is profit divided by investment and subtracts costs. A ROAS of 4 means every 1 spent returned 4 in revenue — but at a 20% margin that 4 produces only 0.8 in gross profit, so after the 1 of ad spend the campaign lost 0.2. That is why this tool insists on a margin figure.
How is break-even ROAS calculated?: It is 1 divided by the gross margin. A 50% margin needs a ROAS of 2 to break even, 25% needs 4, and 20% needs 5. The lower the margin, the more the advertising has to deliver, which is why low-margin products struggle to grow on paid traffic.

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