Interactive tool
Break-even ROAS & profit margin calculator
Enter your real numbers and find out whether the product can survive paid traffic. Everything updates as you type, and the link at the bottom saves your figures so you can share or revisit them.
Prices verified August 20266 min readNo email required
Verdict
Enter your numbers.
- Gross profit per order
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- Break-even ROAS
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- Break-even CPA
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- Net profit per order
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- Net margin
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- Recommended minimum price
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Before ad spend
Price ÷ gross profit
Maximum you can pay per customer
After ad spend
Net profit ÷ price
3x landed cost
Profit at different ROAS levels
| ROAS | Ad cost per order | Net profit per order | Net margin | Monthly profit |
|---|
Monthly projection at your inputs
- Revenue
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- Ad spend
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- Refund cost
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- Net profit
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Net profit subtracts your platform and app subscriptions and the cost of refunded orders (product and shipping are lost, the ad spend that produced them is lost too).
The formulas, so you can check the maths
Gross profit per order
price − product − shipping − other − (price × fee%) − fixed fee49.95 − 8.40 − 4.60 − 0 − 1.45 − 0.30 = $35.20
Break-even ROAS
selling price ÷ gross profit per order49.95 ÷ 35.20 = 1.42
Break-even CPA
gross profit per order (that is the whole formula)$35.20 maximum cost per purchase
Calculator questions
How do you calculate break-even ROAS?
Break-even ROAS = selling price ÷ gross profit per unit. Gross profit is the selling price minus product cost, minus shipping, minus payment fees, minus any per-order costs. On a $49.95 product with $8.40 product cost, $4.60 shipping and $1.75 of payment fees, gross profit is $35.20, so break-even ROAS is 49.95 ÷ 35.20 = 1.42. Every dollar of ad spend must return $1.42 before you make anything.
What is break-even CPA and why does it matter more than ROAS?
Break-even CPA is simply your gross profit per unit — $35.20 in the example above. It is the maximum you can pay to acquire one customer before you lose money. It matters more than ROAS because it is a single number you can compare directly against the cost per purchase in your ads manager, with no ratio maths in the middle. ROAS is useful for comparing campaigns; CPA is what you act on.
What profit margin is healthy for dropshipping?
Aim for 15–25% net margin after ad spend, which usually requires 60–70% gross margin before ads. Price at a minimum of 3x landed cost to get there. Below a 2.5x markup, break-even ROAS climbs above 1.8 and there is no room left for a bad testing week, a refund spike or a CPM increase in Q4.
Should I include shipping the customer pays in the calculation?
Only if you actually charge it. Free shipping is the norm on impulse products, so the calculator assumes the shipping cost comes out of your margin. If you charge $4.95 shipping on a $4.60 cost, add the $0.35 difference to your selling price rather than netting it against the cost — that keeps the break-even ROAS honest, because ad platforms report revenue including shipping charged.
Why does my calculated profit not match my bank account?
Four usual suspects: refunds and chargebacks (each chargeback is the order plus a $15 fee, and costs $54.73 all in), currency conversion on international payouts (1–2%), the platform and app subscriptions that are not per-order costs, and ad spend on products that never sold. The monthly projection in this calculator subtracts subscriptions and refunds so the number resembles reality rather than a spreadsheet.
What is a good minimum selling price for a dropshipping product?
Three times your landed cost, as a floor. On a $13 landed cost that means $39 retail. It is a floor, not a target — the reason it works is that it leaves roughly $25–$35 of gross profit, which is enough to absorb a $20–$25 CPA and still make money. Below it, you need an unusually cheap CPA to survive, and cheap CPAs are exactly what you cannot count on.