ROAS is revenue, not profit
ROAS compares conversion value or revenue with ad spend. It does not subtract COGS, fulfillment, payment processing, returns or other operating costs, so a campaign can have positive ROAS and still lose money.
Calculate contribution before advertising
Subtract non-ad costs from the revenue generated by an average order. The remaining contribution is the maximum modeled CPA you can afford before profit reaches zero.
Turn break-even CPA into ROAS
Divide average order value by break-even CPA to estimate break-even ROAS. If your actual ROAS is below that threshold, the modeled campaign is not covering the entered costs.
Connect conversion rate to CPC
Break-even CPC can be estimated by multiplying break-even CPA by conversion rate. This helps connect store economics with auction-level click costs, although actual campaign performance will vary.
Calculate your own numbers
Methodology note: Platform fees and commercial terms can change. Use the linked calculators with the rates and costs that apply to your account and verify current platform documentation before making a business decision.