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Break-even ROAS & MER calculator
A free profit calculator for Shopify and DTC brands. Enter your unit economics to get your break-even ROAS, MER, contribution margin and maximum CPA, then see how much ad spend your margins can carry once repeat orders count.
Spend vs. profit
The retention lever
| Line item | Per order | % of AOV |
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Estimates for planning only. Not financial advice.
How the math works
What the calculator is telling you
Divide your average order value by your contribution margin per order: break-even ROAS = AOV ÷ contribution margin. For example, an apparel brand with an $85 AOV, 35% product cost, $9 shipping, 2.9% + $0.30 payment fees and 15% returns keeps $30.74 per order. Its break-even ROAS is $85 ÷ $30.74 = 2.77× on the first order. If customers place 0.45 repeat orders in their first year, break-even ROAS at 12-month payback drops to 1.91×.
Contribution margin is what's left of an order after the costs that scale with it: product cost, shipping and fulfillment, payment processing and returns. The formula is AOV × (1 − COGS% − fees% − returns%) − shipping − $0.30. Every other number on the page comes from it. Fixed costs like rent and salaries aren't included, so break-even here means break-even on marketing.
MER (marketing efficiency ratio) is total store revenue divided by total ad spend. It counts every order from every channel, new and returning. ROAS is what an ad platform reports for its own campaigns. Break-even MER is 1 ÷ contribution margin %, and target MER takes your profit target out first: 1 ÷ (CM% − target%). MER is the number finance can check against the P&L.
There is no universal good MER, because it depends on your margin. A brand that keeps 36% of every order breaks even at a 2.77× MER and needs about 3.82× to keep 10% of revenue as profit. A brand with a 60% margin breaks even at 1.67×. Start from your own contribution margin, then set your MER target from the profit you want to keep.
The first-order max CPA is one contribution margin: what you can pay for a customer and break even on their first purchase. The 12-month max CPA multiplies that by 1 + repeat orders, because a customer who buys again keeps paying back what you spent to acquire them. Break-even ROAS for each is AOV ÷ max CPA, measured on the first order, which is what ad platforms report for new customers.
New customers get more expensive as you spend more, because you reach colder audiences. The calculator models that as CPA × (spend ÷ today's spend)^k, where k comes from the scaling setting. Profit for each month's new customers is customers × 12-month margin − spend. The peak is where profit tops out. The ceiling is where a month's new customers stop paying back, even after a year of repeat orders.
The unit economics are exact for the numbers you enter. The spend curve is a model, so use it for direction, not as a forecast. The category presets are rough starting points, not benchmarks. For a read on your actual store, we run the same math on your Shopify and Klaviyo data.
Now make the numbers move
Every repeat order raises the CPA you can afford, which lets you outbid competitors on the same ad. We build that across Klaviyo, Shopify and paid media. Tell us where your numbers stand. If we're the right partner, you'll know within thirty minutes.