Break-Even ROAS
BusinessPerformance
Break-even ROAS is the minimum return on ad spend needed to cover the cost of goods sold, before any profit is made.
Break-even ROAS is a direct function of gross margin — a lower-margin product needs a higher ROAS just to avoid losing money, which is the entire reason a flat "3x ROAS is good" benchmark is meaningless without knowing the margin behind it. See ROAS for the fuller discussion of why this distinction matters.
Break-Even ROAS
Break-Even ROAS = 1 ÷ Gross Margin (as a decimal)Example
At a 25% gross margin, break-even ROAS = 1 ÷ 0.25 = 4x. Every ₹1 spent on ads needs at least ₹4 in revenue just to cover the cost of goods, before any profit.
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