Break-Even ROAS Table

How to use this table

Find your row using margin after product, shipping, and payment costs. That number is your floor. Then apply two corrections before setting a Google Ads target: read your non-branded ROAS against it (blended numbers flatter the account, as covered in the branded search check), and price in repeat purchases where they honestly exist. For the full budget math, the budget calculator runs your numbers end to end.

A worked example

Say you sell a $90 product. Cost of goods is $40, shipping costs you $8, and payment processing takes about $3. That leaves $39 of contribution margin, so your margin is roughly 43 percent and your break-even row sits near 2.3. Every dollar of ad spend has to return about $2.30 before you have made a cent.

Now the part most people skip. If your account reports a 4.0 blended ROAS you look comfortably profitable, but split brand from non-brand and the cold campaigns may be running at 1.9. Cold acquisition is losing money at that point while the average hides it, because people searching your name were going to buy anyway. The blended number says scale. The cold number says fix the targeting first.

This is also why a single target ROAS applied across an entire account tends to misfire. A 43 percent margin product and a 20 percent margin product have break-even floors of 2.3 and 5.0. They cannot share one goal without one of them quietly losing money, so group products by margin band and set targets per band.

When to set a target above break-even

Break-even keeps you level, and nobody runs ads to break even. How far above the floor you sit depends on what the account has to fund. If ads carry overheads and salaries, the gap needs to be wide. If you are buying a first order from a customer who reliably comes back three times, you can run the first purchase close to the floor and take the profit on repeat orders, provided repeat behaviour is something you have measured rather than assumed.

One caution from auditing accounts: teams often set a high target ROAS believing it is a safety setting. Above a certain point it simply throttles delivery, volume collapses, and the account looks efficient while the business grows slower. Efficiency you cannot scale is not a win. Start near a target you can actually hit at volume, then tighten in steps once the data supports it.

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