Your breakeven ROAS is one divided by your contribution margin: at a 40% margin you break even at 2.5x, at 30% you need 3.33x, at 25% you need 4.0x. Any ROAS above breakeven is profit; anything below burns cash, no matter what Meta reports. Find yours with the calculator below, then buy media to that number.
ROAS without margin is a vanity metric
A 3x ROAS sounds good until you ask the only question that matters: what is your margin? At a 40% contribution margin, a 3x return is comfortably profitable. At a 25% margin, that same 3x is losing money on every order. The number on its own tells you nothing.
This is why two stores can chase the identical ROAS target and get opposite results. Profit does not live in the ad platform. It lives in the gap between what an order earns you and what it costs you to win, and ROAS only becomes useful once you anchor it to that gap.
The formula: breakeven ROAS = 1 divided by contribution margin
Contribution margin is what a sale leaves you after the costs that scale with each order: cost of goods, shipping, payment and Mobile Money fees, and fulfilment. If an order keeps 40% after those, your contribution margin is 40%.
Breakeven ROAS is simply one divided by that margin. At 40% you break even at 2.5x, because you need to make back the 1 unit of ad spend from the 0.40 of contribution each revenue unit provides. Below that ROAS you lose money; above it you earn. Everything else is a target you set on top.
Interactive tool
Breakeven ROAS calculator
Enter your margins to see the ROAS you actually need. Anything above breakeven is profit; anything below burns cash, whatever the ad platform reports.
Revenue left after cost of goods sold (COGS), as a share of the order.
Shipping, payment and MoMo fees, and fulfilment per order, as a share of revenue.
What you want to keep as profit after ad spend, as a share of revenue.
Contribution margin
37%
What each order contributes before any ad spend.
Breakeven ROAS
2.70×
Spend that returns less than this is a loss, even at a high reported ROAS.
Target ROAS (keep 15% profit)
4.55×
Buy media to this number to hit your profit goal, not to whatever ROAS the platform shows.
The formula is simple: breakeven ROAS = 1 ÷ contribution margin. The catch is that it only works on honest numbers. If your reported ROAS is inflated, you will think you are above breakeven when you are below it, which is exactly why we rebuild tracking before we buy media.
From breakeven to a profit target
Breakeven keeps you level. To actually earn, set a target profit margin and solve for the ROAS that delivers it: target ROAS equals one divided by (contribution margin minus your target profit). Want to keep 15% of revenue as profit at a 40% margin? You need roughly a 4x return.
The calculator above does this for you. Move the sliders to your real numbers and you get both your breakeven and your target ROAS, so you know the exact line campaigns have to clear to be worth scaling.
Why this only works on honest numbers
There is a trap. If your reported ROAS is inflated, and platform ROAS almost always is, you will believe campaigns are above breakeven when they are quietly below it. You will scale a loss thinking it is a win.
That is why margin-first buying depends on trustworthy measurement. Rebuild tracking against real orders first, then apply your breakeven, and the calculator becomes a decision tool instead of wishful thinking. Buy to the number, not to the dashboard.