Before you decide whether a campaign is working, you need to know the number it has to beat. Enter your margins and this tells you the ROAS you need to break even and the most you can pay to acquire a customer.
Take a skincare brand selling an $80 serum. Here is what actually leaves the business on every order, before a single dollar of advertising.
| Per order | Amount |
|---|---|
| Average order value | $80.00 |
| Cost of goods | $24.00 |
| Shipping and packaging | $9.00 |
| Payment processing (about 2.9% + 30c) | $2.62 |
| Gross profit | $44.38 |
That $44.38 is the entire budget available to acquire the customer. It gives a breakeven ROAS of 1.80x and a maximum CPA of $44.38. Spend $45 to win that order and the brand has paid 62 cents for the privilege of shipping a serum.
Now the part that catches people out. If you want to keep 20% net profit, that is $16 an order, so the money available for ads drops to $28.38. The ROAS you actually need is 2.82x, not 1.80x. The gap between those two numbers is where most accounts quietly lose money.
Four lines, and you can check them on the back of an envelope.
Breakeven ROAS and max CPA are the same fact said two ways. ROAS is the ratio, CPA is the dollar figure. Media buyers tend to think in ROAS and founders tend to think in dollars, which is why the same conversation often goes round in circles.
Shipping, packaging and payment fees are the ones that get forgotten, and they are rarely small. In the example above they are $11.62 an order, which is 26% of the gross profit. Leave them out and your breakeven ROAS looks like 1.43x instead of 1.80x, and you will happily run campaigns that lose money while the dashboard says they are winning.
Breakeven is the floor, not the target. It is the number below which you are definitely losing money. Sitting exactly on it means you worked for nothing.
Meta reports on what it thinks it drove. Your bank account reports on everything. Judge the account on blended performance, total revenue divided by total ad spend, and use the platform number for deciding between ads rather than deciding whether the whole thing works.
If a real share of customers order again, you can afford to pay more for the first order than this calculator suggests. That is a legitimate strategy and it is how most subscription brands work. It is only legitimate if you have measured the repeat rate from actual order history rather than hoped for it.
Last reviewed 4 September 2026.
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