Breakeven ROAS
Breakeven ROAS is the return on ad spend at which advertising exactly covers its own cost after product, fulfillment, and payment costs. It equals AOV divided by contribution margin per order.
A store keeping 40% of each order as contribution margin breaks even at 2.5 ROAS (1 ÷ 0.40). Any campaign below that loses money on every conversion it reports as a win, no matter how healthy the dashboard looks.
Because margins vary across a catalog — often by 20 points or more between categories — a single account-wide breakeven is wrong for nearly everything it governs. Compute it per margin band and set campaign targets from each band’s own economics.
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