The short answer: Break-Even ROAS is the minimum ROAS to avoid losing money on your ads. It's calculated as 1 divided by your margin before ads. If you keep 40% of every sale after paying for the product, fees, installments and shipping, you need a ROAS of 2.5. Below that number, every sale costs you money. Above it, you make money.
What is Break-Even ROAS?
ROAS (return on ad spend) is how much you sell for every peso you put into ads: if you spend $25,000 and sell $100,000, your ROAS is 4. Break-Even ROAS (also written breakeven ROAS) is the point where what you keep from those sales exactly covers what you spent on ads. You neither make nor lose money.
It's the number you have to compare any ROAS against. A ROAS of 3 can be excellent for one store and a loss for another: it depends on how much margin each one has left before paying for ads.
How do you calculate Break-Even ROAS?
Break-Even ROAS = 1 ÷ margin before ads
Margin before ads = (sale − product cost − fees − installments − shipping − discounts) ÷ sale
- Take a typical sale from your store.
- Subtract every variable cost except advertising: product, your platform's fee, the payment fee, the installment cost, the shipping you absorb and discounts.
- Divide what's left by the sale price. That's your margin before ads.
- Divide 1 by that margin. With a 40% margin: 1 ÷ 0.40 = 2.5.
What ROAS do I need to be profitable?
It depends only on your margin before ads. This table gives you the minimum to avoid losing money:
| Margin before ads | Break-Even ROAS |
|---|---|
| 60% | 1.67 |
| 50% | 2.00 |
| 40% | 2.50 |
| 30% | 3.33 |
| 25% | 4.00 |
| 20% | 5.00 |
That's why "a ROAS of 3 is good" means nothing on its own. With a 50% margin, a ROAS of 3 makes you money. With 25%, it loses you money on every sale.
A Mercado Pago example: how much each installment plan raises your Break-Even ROAS
A Tiendanube store (Esencial plan, 2% per transaction) that gets paid through Mercado Pago with an 18-day payout (3.39% + VAT). Product: 35% of the price. Shipping it absorbs: 6%. It's a monotributista (Argentina's simplified tax regime), so the VAT on fees is a cost.
| How the customer paid | Installment cost (Mercado Pago, + VAT) | Margin before ads | Break-Even ROAS |
|---|---|---|---|
| Single payment | — | 52.9% | 1.89 |
| 3 interest-free installments | 10.49% | 40.2% | 2.49 |
| 6 interest-free installments | 18.69% | 30.3% | 3.30 |
| 12 interest-free installments | 32.29% | 13.8% | 7.23 |
The same campaign with a ROAS of 3 makes money if your customers pay in one or three payments, and loses money if they pay in six. On twelve installments you need a ROAS above 7 just to break even, something almost no campaign can sustain.
In practice your store has a mix: some customers pay in one payment and others in installments. Your real Break-Even ROAS is the weighted average across that mix, and it changes every time you change your installment promotion. If you're a registered VAT taxpayer (responsable inscripto), you recover the VAT on fees and your margins are a bit higher than in the table.
Which ROAS do I compare it to: Meta's or mine?
Yours. The ROAS in Ads Manager counts the sales Meta attributes to itself within its window, which aren't the same ones your store recorded: sometimes it overcounts and sometimes it undercounts. If you compare your Break-Even ROAS against Meta's number, you can think you're making money when you're losing it.
The honest comparison is against your blended ROAS: all your revenue for the period divided by all your ad spend. We explain it in how to calculate your real ROAS and in Blended ROAS.
What's the difference between Break-Even ROAS and target ROAS?
Break-even is the floor for not losing money. Target is what you need to make the profit you want:
Target ROAS = 1 ÷ (margin before ads − profit you want per sale)
With a 40% margin and a goal of keeping 15% of every sale: 1 ÷ (0.40 − 0.15) = 4. If your campaigns don't reach 4, you're not losing money, but you're not making what you planned either.
How do I lower my Break-Even ROAS?
By raising your margin before ads. The levers, from highest to lowest impact for most stores:
- Review your interest-free installments. Going from 6 to 3 installments in the example lowers break-even from 3.30 to 2.49. We break it down in the cost of interest-free installments.
- Raise your price or build bundles that raise the ticket without raising shipping cost.
- Change your payout timing: on Mercado Pago, getting paid immediately costs 6.29% and at 35 days 1.49%, plus VAT.
- Set a minimum for free shipping.
- Negotiate your product cost when volume allows it.
What about Mexico?
The formula is the same; the costs change. Mercado Pago Mexico charges 3.49% + $4 per payment with immediate availability, 3.19% + $4 at 14 days and 2.95% + $4 at 30 days. Interest-free months (meses sin intereses) add, on top of that fee, 4.69% for 3 months, 7.69% for 6 and 12.89% for 12. All + VAT.
These costs are lower than in Argentina, so the jump in Break-Even ROAS from offering interest-free months is smaller, but it doesn't go away.
FAQ
What's a good ROAS for an e-commerce store?
One that's above your Break-Even ROAS. There's no universal number: a store with a 60% margin makes money at a ROAS of 2, one with 25% needs more than 4.
Does Break-Even ROAS include fixed costs?
No. It only includes the costs that move with each sale. Fixed costs (salaries, rent, tools) are covered by the profit left above break-even.
Is it the same as the break-even point?
They're cousins. The break-even point tells you how much you need to sell to cover your fixed costs. Break-Even ROAS tells you how hard every peso of ad spend has to work so you don't lose money on each sale.
Sources
- Argentina: Mercado Pago Checkout fees (effective 3/6/2026, CABA rates) and cost of offering interest-free installments (effective 2/10/2026).
- Tiendanube: plans and transaction fees (updated 8/28/2026).
- Mexico: online payment fees and interest-free months.
Verified on September 22, 2026. Rates change several times a year.
Escalafy calculates your margin before ads on every real order, including the installment plan each customer chose, and shows you which campaigns are above and below your break-even. How it works.
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