ROAS & CAC Break-Even Calculator
Connect unit economics, CPC and conversion rate to break-even ROAS, estimated CAC and first-order profitability.
Product economics
What the customer pays on average per order
Manufacturing, wholesale, or production cost
Cost to fulfil and ship one order
e.g. Stripe: 2.9%
e.g. Stripe: $0.30
Campaign metrics
% of clicks that convert to a purchase
Average CPC from your ad platform
Optional: enables monthly projection
Fill in AOV, cost, conversion rate, and CPC to see your results.
Practical guidance
About this tool
This calculator connects first-order product economics with paid-acquisition performance. It uses average order value, direct product and fulfilment costs, payment fees, conversion rate and CPC to model whether an order remains profitable after advertising.
The output includes gross profit and margin before advertising, estimated CAC, profit or loss per order, break-even ROAS, maximum affordable CPC and break-even conversion rate. When monthly spend is entered, it also estimates clicks, conversions, revenue and net profit for that month.
Not sure whether your acquisition economics can scale?
I can review the relationship between margin, CAC, conversion rate and paid-media performance, then identify which changes are most likely to improve profitability.
How to use the break-even calculator
- 1Enter average order value and direct product cost.
- 2Add shipping or fulfilment cost and check the percentage and fixed payment fees.
- 3Enter the percentage of ad clicks that become purchases.
- 4Enter average CPC from the advertising platform.
- 5Add monthly ad spend only when you want the monthly projection.
- 6Compare the calculated break-even figures with current campaign performance.
How the calculations work
Every calculation uses the values entered in the interface. Percentages are converted to decimal rates before multiplication or division.
| Metric | Calculation | Plain-English meaning |
|---|---|---|
| Payment fees | AOV × payment fee % + fixed fee | Estimated processing cost on one average order. |
| Gross profit per order | AOV − product cost − shipping − payment fees | The amount left to acquire the customer before the first order becomes unprofitable. |
| Gross margin | Gross profit ÷ AOV × 100 | The percentage of order revenue left before advertising. |
| Estimated CAC | CPC ÷ conversion rate | The modeled advertising cost required to produce one order. |
| Profit or loss per order | Gross profit − estimated CAC | The amount left after direct order costs and modeled acquisition cost. |
| Break-even ROAS | 100 ÷ gross margin % | The minimum revenue-to-ad-spend ratio that covers the direct costs entered. |
| Maximum CPC | Gross profit × conversion rate | The highest CPC that reaches first-order break-even at the entered conversion rate. |
| Break-even conversion rate | CPC ÷ gross profit × 100 | The minimum share of clicks that must purchase at the entered CPC. |
How to interpret the results
- A ROAS below the calculated break-even level means the first purchase loses money under the entered assumptions.
- A CPC above the calculated maximum requires stronger conversion, better margin, higher order value or lower traffic cost.
- Being only slightly above break-even may leave too little profit for overhead, returns or growth investment.
- Scaling spend can change CPC, conversion rate and CAC, so projections should not be treated as fixed forecasts.
- Customer lifetime value may justify a higher first-order CAC only when reliable repeat-purchase data supports that decision.
Important costs and assumptions
The calculator only uses the costs represented by its inputs. Interpret the output alongside other costs that apply to your business.
- Discounts, returns, refunds and taxes.
- Warehousing, salaries, overhead and customer support.
- Creative production, agency charges and other platform fees.
- Repeat purchases, customer lifetime value and incrementality.
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Frequently Asked Questions
How is break-even ROAS calculated?
The calculator divides 100 by the gross-margin percentage derived from your inputs. If gross margin is 40%, the modeled break-even ROAS is 2.5x before overhead and costs not represented in the calculator.
How does the calculator estimate CAC?
Estimated CAC is average CPC divided by the entered conversion rate as a decimal. For example, a $2 CPC and a 2% purchase conversion rate produce a modeled CAC of $100.
What does maximum affordable CPC mean?
It is gross profit per order multiplied by the entered conversion rate. At that CPC, the modeled acquisition cost equals the gross profit available from the first order.
Does a profitable result include all business costs?
No. It includes product cost, shipping, payment fees and modeled ad spend. Add context for discounts, returns, tax, overhead, creative, agency fees and any other relevant cost before making budget decisions.