Break-Even ROAS Demystified: Calculate the Exact Advertising Thresholds for Facebook, Instagram, and Google Ads

If you are spending to acquire customers, there is one guardrail that keeps you out of the red: break-even ROAS. Hit it and you can scale. Miss it and every click widens a loss. This guide shows you the simple formula, then turns it into practical CPC and CPA thresholds for Meta platforms and Google Ads using real numbers you can adapt today.

What break-even ROAS really means

Return on ad spend is revenue divided by ad spend. Meta defines Website Purchase ROAS as purchases conversion value divided by amount spent, based on the pixel or Conversions API events, as described in the Meta Business Help Center. To find the floor you must not cross, use break-even ROAS.

A widely accepted formulation is break-even ROAS equals 1 divided by your average profit margin percent after variable costs. Invoca’s breakdown describes it plainly: break-even ROAS = 1 divided by average profit margin percent. In other words, compute your contribution margin rate and invert it.

• Contribution margin rate = 1 minus (variable costs per order divided by selling price)
• Break-even ROAS = 1 divided by contribution margin rate

Fixed costs like rent or apps do not change the per-order break-even ROAS. They matter for monthly break-even units, which you can model in seconds with the free calculator at FullyCounted.

Step-by-step: from margin to ROAS to CPC and CPA thresholds

Start with a single product so the math is tangible.

• Price: 50 dollars
• COGS: 20 dollars
• Shipping: 6 dollars
• Payment processing: Shopify Basic plan rates start at 2.9 percent plus 0.30 per online transaction, per Shopify’s merchant fees explainer

Payment fee on a 50 dollar order is 1.45 plus 0.30 equals 1.75. Total variable costs are 20 plus 6 plus 1.75 equals 27.75.

• Contribution margin dollars: 50 minus 27.75 equals 22.25
• Contribution margin rate: 22.25 divided by 50 equals 44.5 percent
• Break-even ROAS: 1 divided by 0.445 equals 2.25x
• Break-even CPA: equal to contribution margin dollars, so 22.25 dollars

That ROAS floor is platform agnostic. Next, translate it into CPC thresholds by campaign type using observed conversion rates.

Google Ads thresholds

For ecommerce on Google Search, the average conversion rate is 2.81 percent according to the 2025 Store Growers benchmark. With a break-even CPA of 22.25 dollars, the maximum break-even CPC is CPA times CVR.

• Break-even CPC on Google Search: 22.25 times 0.0281 equals about 0.62 dollars

Store Growers also reports the average ecommerce Search CPC at 1.16 dollars, which is almost double the 0.62 dollar break-even in this example. You would need either higher conversion rates, higher AOV, or better margins to buy profitably at that average price. If you use Target ROAS bidding, Google’s automated bidding help explains that Target ROAS aims to deliver as much conversion value as possible at your specified ROAS target, which you can set to at least 2.25x here.

For context, across industries the overall 2024 average Google Ads conversion rate was 6.96 percent, and average CPC was 4.66 dollars, per WordStream’s 2024 report. Those are not ecommerce-only figures, but they show why tight keyword intent and landing page quality are essential when your breakeven CPC is below a dollar.

Facebook and Instagram thresholds

Meta traffic campaigns deliver relatively low CPCs. The 2024 average CPC for traffic campaigns across industries was 0.77 dollars, per WordStream’s Facebook Ads benchmarks. But conversion to purchase happens on your site, so your site’s ecommerce conversion rate determines the break-even CPC.

What site conversion rate should you use? Shopify’s guidance notes that average ecommerce conversion rates are around 2.5 to 3 percent across industry leaders, and the average among Shopify stores is 1.4 percent, with 3.2 percent placing you in the top 20 percent, per Shopify’s conversion rate overview.

• If your site converts at 2.0 percent, break-even CPC on Meta traffic is 22.25 times 0.02 equals 0.45 dollars
• If your site converts at 3.0 percent, break-even CPC rises to 22.25 times 0.03 equals 0.67 dollars

At a 2 percent site conversion rate, the break-even CPC of 0.45 dollars sits below the 0.77 dollar cross-industry average CPC for Meta traffic. That signals you should improve on-site conversion, raise AOV, or use higher intent objectives and audiences. For Meta lead campaigns, WordStream reports an 8.78 percent average conversion rate across industries in 2024, but that is lead conversion rather than purchase, so apply your own purchase rate from leads to back into a CPA floor.

How to raise your break-even thresholds

When the math looks tight, you can increase your allowable CPC and CPA by improving margin or conversion. The practical steps below move the levers that directly affect the formulas.

• Reduce variable costs. Repack to cut dimensional weight and compare carriers weekly. Our deep dive on fixed vs variable costs with 2025 benchmarks shows how surcharges and payment fees stack up, with fresh numbers you can plug in.
• Increase AOV. Bundles and post-purchase upsells lift contribution margin dollars, raising your CPA ceiling. If you shift to a replenishment subscription, model the LTV and CAC payback before changing offers. This walkthrough on subscription vs one-time LTV and payback gives templates and ranges.
• Improve site conversion. Target a realistic ecommerce baseline for your category and price point using Shopify’s benchmarks. Even small wins lift your break-even CPC. On Meta, stronger conversion tracking via Conversions API and high intent audiences help translate low CPC traffic into purchases; Meta’s ROAS metric definition in the Help Center explains how value is attributed.
• Align bidding to your threshold. In Google Ads, set Target ROAS at or above your 2.25x floor from this example, as described in Google’s bidding help. On Meta, monitor ROAS and purchase CPA against your contribution margin dollars.

A quick, repeatable workflow

1. Calculate contribution margin and break-even ROAS: use the free on-page calculator at FullyCounted to enter price, COGS, shipping, processing fees, and monthly fixed costs. You will instantly see contribution margin dollars, break-even units, and profit projections.

2. Convert to CPA and CPC thresholds: break-even CPA equals contribution margin dollars; break-even CPC equals CPA times expected conversion rate for each channel and objective.

3. Sanity check with current benchmarks: use Store Growers’ ecommerce Search CVR and CPC and WordStream’s Facebook CPC and conversion data to judge feasibility, then adjust product economics or targeting.

4. Save and export for your plan: FullyCounted lets you save analyses and export reports so you can share thresholds in your launch deck or media plan. Explore more operator-focused guides on the FullyCounted blog, and review our terms and privacy policy if you will share data with collaborators.

Ready to put numbers to work and launch fast? If you are setting up your store, the transparent plans and built-in payment rates at Shopify make it easy to model fees alongside your shipping and marketing, then go live without complex tools.