Works out the return on ad spend (ROAS) you need just to break even, the most you can pay to win one sale (maximum CPA), and the ad budget that a sales target allows. For anyone running paid ads who wants to know the line between profit and loss before spending.
How to use it
Bring the price of one sale and your gross margin. The result updates as you type, and nothing leaves your browser.
- Pick your currency and enter the price a customer pays for one sale, as it appears in your ad platform's revenue.
- Enter your gross margin: the share of that price left after the cost of the product itself, before ad spend.
- Optionally enter how many sales you want from the campaign to see the budget that keeps it at break-even.
- Compare your platform's ROAS with the break-even ROAS. Below it, each sale loses money; above it, each sale pays for its ad cost.
How Reavlo tests this
The calculator is plain arithmetic, run in your browser. Every step is listed under Show the math, in the order it runs.
- Profit per sale = price × gross margin.
- Break-even ROAS = 1 ÷ gross margin. At that ROAS the revenue an ad produces exactly covers its own cost and the cost of the product.
- Maximum CPA = price × gross margin, the same number as the profit per sale: pay more than this to win a sale and the sale loses money.
- Budget for a target = maximum CPA × target sales. It is the spend at which the campaign neither gains nor loses.
The what-if table repeats the calculation with the margin 10 percentage points lower and higher, never below 0.01% or above 100%. Amounts are in major units of the currency you pick (ISO 4217), rounded to 2 decimals; ROAS is rounded to 4 decimals. Rates are stored as 0 to 1 and shown as percentages.
Limits. Gross margin here is the share left after the cost of the product. Shipping, payment fees, returns, taxes and other costs that scale with each sale belong in the margin you enter; fixed costs do not. The result is a break-even line, not a profit target: to earn a profit, aim for a ROAS above it. A single price and margin describe one product; for a mixed basket use the average of each.
Questions
What is a break-even ROAS?
It is the revenue each unit of ad spend must bring in for the campaign to cover its ad cost and the cost of what it sold. With a 40% gross margin it is 2.5: every 1 spent must return 2.5 in revenue.
How is the maximum CPA different from break-even ROAS?
They say the same thing in two units. ROAS compares revenue to spend, while the maximum CPA is the price you can pay for one sale, which is the profit that sale leaves before ad cost.
Which margin should I enter?
Use gross margin per sale: price minus the cost of the product and any cost that grows with each sale, such as shipping or payment fees, divided by the price. If it changes by product, enter the average for what your ads sell.
Does a ROAS above break-even mean I make a profit?
It means each sale covers its ad cost and its product cost. Fixed costs such as salaries and tools still have to be covered by the profit left over, so aim above the break-even line.