Marketing & Advertising
Dropshipping Break-Even ROAS Calculator
Calculate realized revenue per order, percentage fees, contribution before advertising, break-even ad spend, target-profit ad spend, required ROAS, and profit at the planned ROAS.
Revenue after refund and chargeback allowance-
Payment and platform fees per order-
Contribution before advertising-
Maximum ad spend at break-even-
Break-even ROAS-
Maximum ad spend at target profit-
ROAS required for target profit-
Ad spend implied by planned ROAS-
Profit at planned ROAS-
Decision view
ROAS threshold and safety-zone gauge
ROAS threshold and safety-zone gaugePlanned ROAS is plotted against the exact break-even and target-profit thresholds derived from per-order contribution.
Exact scenario comparisonPlanned advertising ROAS changes while all other entered assumptions remain constant.
| Planned advertising ROAS | Revenue after refund and chargeback allowance | Payment and platform fees per order | Contribution before advertising | Maximum ad spend at break-even | Break-even ROAS | Maximum ad spend at target profit | ROAS required for target profit | Ad spend implied by planned ROAS | Profit at planned ROAS |
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How to use Dropshipping Break-Even ROAS Calculator
- Enter selling price and expected refund rate.
- Enter delivery, fee, support, and target-profit assumptions.
- Compare planned ROAS with both the break-even and target-profit thresholds.
Calculator guide
Understanding Dropshipping Break-Even ROAS Calculator
Dropshipping break-even ROAS is the revenue-to-ad-spend ratio at which contribution after refunds, product delivery, transaction fees, and support exactly covers advertising.
Detailed calculation process
Derive break-even and target-profit ROAS from one completed order
The default uses a $58 selling price, 6% refunds and chargebacks, $24 product and shipping cost, 3% payment fees, 2% store and app fees, $3 support cost, an $8 target profit, and 2.5 planned ROAS.
General formula: R = S × (1-r/100)F = S × (p+a)/100C = R-D-F-HA_BE = max(C,0)ROAS_BE = S/A_BEA_T = max(C-T,0)ROAS_T = S/A_TA_P = S/ROAS_PP = C-A_P Refunds reduce realized revenue, while the entered payment and platform rates are charged on selling price. What remains after delivery and support is the maximum advertising spend at break-even; reserving target profit reduces the allowable ad spend and increases required ROAS.
What each symbol means
Worked substitution with the default inputs
The default order has $24.62 contribution before ads, a 2.3558 break-even ROAS, a 3.4898 target-profit ROAS, and $1.42 profit at the planned 2.5 ROAS.
Purpose-built visual
ROAS threshold and safety-zone gauge
The live threshold gauge places planned ROAS against the loss, break-even, and target-profit zones while retaining the per-order contribution figures.
Worked situations
Practical examples
- A store selling an item for $72 with an 8% refund allowance, $32 delivery cost, 5% payment and platform fees, and $4 support cost retains $26.64 before advertising. Break-even ROAS is 72 / 26.64 = 2.7027.
- If that store also requires $10 profit per completed order, only $16.64 remains for advertising. The target-profit ROAS rises to 72 / 16.64 = 4.3269, showing why a profitable target is stricter than simple break-even.
- At a planned ROAS of 3.0, the implied ad spend is $24 per order. With $26.64 contribution before ads, planned profit is only $2.64, so the campaign clears break-even but misses the $10 target.
Better inputs
Useful tips
- Enter the amount actually collected per fulfilled order after discounts, refunds, and payment fees rather than the storefront list price.
- Build product, fulfillment, shipping subsidy, and support cost into the pre-ad contribution so break-even ROAS is not understated.
- Set planned ROAS above the calculated threshold when chargebacks, creative testing, or delayed attribution can erode the apparent margin.
Before relying on the result
Limitations and common mistakes
- Taxes, duties, creative production, subscription fees, attribution delays, repeat purchases, and lifetime value are excluded.
- Refund and fee timing can differ from this per-order planning model.
- A zero allowable ad spend makes the corresponding ROAS threshold non-actionable.
Reference
Key terms
- ROAS
- Attributed revenue divided by advertising spend.
- Contribution before ads
- Realized revenue after non-advertising variable costs.
- Target-profit ROAS
- ROAS required after reserving the entered profit per order.
Important note
Use realized selling price and the full expected cost of refunds, fulfillment, payment processing, store fees, and support. The ROAS thresholds describe first-order economics and do not include lifetime value unless those future margins are entered elsewhere.
Frequently asked questions
Why can target ROAS exceed break-even ROAS?
Target profit reduces the amount available for advertising, so the same selling price must be earned with less ad spend.
Does ROAS include product cost?
ROAS itself does not, but this calculator derives its thresholds after product, shipping, fee, refund, and support assumptions.
Should lifetime value be added?
Only if repeat-purchase margin and retention are supported by reliable cohort data.
Is a higher ROAS always better?
Higher ROAS improves first-order economics, but very restrictive targets can reduce scalable order volume.