How to Calculate Your Break-Even ROAS for Facebook Ads
I promise we will keep the math simple. But this is the most important number in your business. Many people run Facebook Ads and think, "I spent $100 and made $150, I'm rich!" But once you count the cost of the product and shipping, you might actually be losing money. You need to know your "Break-Even Point."
ROAS stands for Return on Ad Spend. It is a simple multiplier. If you spend $1 and get $3 back, your ROAS is 3.0.
Finding Your Magic Number
Let's say you sell a wallet for $50.
The wallet costs you $25 to make and ship.
That means you have $25 left over as profit margin.
If you spend $25 on ads to sell one wallet, you have made $0 profit. You just broke even.
Your revenue ($50) divided by your ad spend ($25) equals 2.0.
So, your Break-Even ROAS is 2.0.
How to Use This Number
Now you have a scorecard. When you look at your Facebook Ads Manager:
If an ad has a ROAS of 1.5, turn it off. You are losing money.
If an ad has a ROAS of 3.0, spend more money! You are making pure profit.
Improving Your ROAS
To get a higher ROAS, you need ads that convert cheaper. Better images and headlines stop the scroll and get you cheaper clicks. Stirling uses AI to build higher-performing ads, helping you push that ROAS number up into the profit zone.
