Calculate Your Break-Even ROAS and CPA: A Step-by-Step Guide for Shopify, Meta, Google, and TikTok Ads

If you run ecommerce ads, there is one question that decides whether you scale or stall: what return do you need to break even. This guide shows you exactly how to calculate break-even ROAS and break-even CPA, then translate those numbers into practical targets for Shopify, Meta, Google, and TikTok. You can plug the same inputs into the free calculator on FullyCounted to see everything update in real time and export a planning report.

What break-even ROAS and CPA really mean

• Break-even CPA is the maximum cost per purchase you can pay and still make exactly zero profit. It equals your contribution margin per order.
• Break-even ROAS is the revenue-to-ad-spend ratio where profit is zero. It equals average order value divided by contribution margin.

Your contribution margin must account for product cost and all variable order costs. That includes payment processing, shipping, pick and pack, and any per-order fees. For most Shopify stores, processing fees are a material line item. According to Shopify’s credit card fee guide, online transactions through Shopify Payments typically range from 2.5 percent to 2.9 percent plus 0.30 dollars depending on your plan.

The formula you can use today

1. Gather your inputs

• Selling price or AOV
• Cost of goods sold
• Variable costs per order including payment fees, shipping, packaging, and fulfillment

2. Calculate contribution margin

Contribution margin per order = Price or AOV minus COGS minus all variable order costs

3. Get the two break-even targets

• Break-even CPA = contribution margin per order
• Break-even ROAS = AOV divided by contribution margin

Example. Suppose a product sells for 40 dollars, COGS is 12, shipping is 5, packaging is 1, and Shopify Payments fees are 2.9 percent plus 0.30 dollars. The fee on 40 dollars is 1.16 plus 0.30 equals 1.46. Contribution margin is 40 minus 12 minus 5 minus 1 minus 1.46 equals 20.54. Your break-even CPA is 20.54 dollars. If your AOV is 48 dollars, break-even ROAS is 48 divided by 20.54 equals 2.34x. Enter these same numbers in the free calculator on FullyCounted and you will see the result instantly, plus how many orders you need to cover your monthly fixed costs like rent, software, and marketing.

If you are unsure what belongs in fixed versus variable costs, the primer on ecommerce fixed vs variable cost benchmarks outlines typical ranges and examples.

Channel by channel: how to apply your targets

Shopify analytics

Start with trustworthy AOV and conversion rate. As a sanity check, the benchmark discussed in Shopify’s conversion rate overview places average ecommerce conversion rates around 2.5 to 3 percent, with the average Shopify store at 1.4 percent based on Littledata. Use your actual numbers, not the benchmarks, to compute contribution margin, then set your break-even CPA and ROAS. If you are launching a new store, you can get selling quickly with Shopify.

Meta Ads Manager

Meta reports purchase value and ROAS in Ads Manager, but reporting for iOS users often relies on privacy-safe modeling. Meta’s documentation explains that Aggregated Event Measurement measures web and app events from iOS 14 plus devices using privacy protective processing, as outlined in Meta’s AEM article. When you optimize, use Cost Per Result Goal or bid controls to align delivery with your break-even CPA. Meta notes that cost control approaches like Bid Cap and Cost Per Result Goal can be used to manage cost per result, as the page on cost controls exceeding goal describes. Set your cost goal at or below your break-even CPA, and monitor the ROAS column against your break-even ROAS. If campaigns cannot deliver at your goal, reduce audience constraints or relax the goal slightly while watching blended profit.

Google Ads

Google offers Target ROAS to maximize conversion value at a specified return. The help article on Target ROAS bidding explains that Google’s AI adjusts bids to reach your selected ROAS on average across spend. If you prefer to control per-order cost, you can use Target CPA. Google defines average CPA as total conversion cost divided by total conversions in its Average CPA definition. Set Target ROAS equal to or slightly above your break-even ROAS, or set Target CPA at or below break-even CPA. Let the algorithm learn for at least one to two conversion cycles before tightening goals.

TikTok Ads Manager

For TikTok Shop, ROAS in reporting is based on attributed gross revenue divided by cost. The page on gross revenue for TikTok Shop Ads clarifies that Shop Ads ROAS equals Total Gross Revenue divided by Total Cost. For app or value-based optimization, TikTok supports a Target ROAS strategy within Smart+, as described in bidding strategies for Value-based Optimization. Start with a Target ROAS at or just above your break-even ROAS, verify purchase value is passing in your pixel or Events API, then scale slowly while watching first order contribution margin.

Common pitfalls that break your math

• Missing fees. Processing fees alone can move your break-even ROAS meaningfully. The ranges outlined in Shopify’s fees article show why you must include percent and fixed components in your variable costs.
• Using platform-reported ROAS without a reality check. Attribution models vary across platforms and devices. Keep a blended view with your ecommerce source of truth.
• Ignoring cash flow or subscriptions. If you sell subscriptions or have strong repeat purchase, you can afford a higher first order CPA and still be profitable. To reason about that tradeoff, read the guide on subscription vs one-time LTV, payback, and cash flow and set a payback window you can finance.
• Chasing channel ROAS while the business loses money. A useful top-line guardrail is MER, which is total revenue divided by total ad spend. As Common Thread Collective explains, MER is a blended view that keeps you honest even when platform ROAS looks strong.

Quick worksheet you can reuse

• Price or AOV: ___
• COGS per order: ___
• Variable costs per order
  • Payment processing: ___
  • Shipping and packaging: ___
  • Other per-order costs: ___
• Contribution margin per order: AOV minus COGS minus variable costs
• Break-even CPA: equals contribution margin per order
• Break-even ROAS: AOV divided by contribution margin

Enter the same numbers in the free Break-Even and Profit Analysis on FullyCounted to see monthly break-even units and revenue based on your fixed expenses. For more ecommerce finance guides, explore the FullyCounted blog. Ready to open your store and put your plan into action? Launch fast with Shopify and use your break-even metrics to set smart ad targets from day one.