Free Download Break-Even ROAS Calculator | Google Ads

Are you running Google advertising campaigns and wondering how to make sure you're not wasting money? Whether it's for shopping or search ads, knowing your break-even ROAS (Return on Advertising Spend) is crucial. This simple calculator can help you figure it out, especially for shopping campaigns where understanding your profit margins per product is key.

Understanding Break-Even ROAS

First things first, let's break down what ROAS is. It stands for Return on Advertising Spend, which essentially tells you how much revenue you're generating for every pound spent on advertising. Knowing your break-even ROAS helps you determine the minimum return you need to avoid losing money on your ads.

Calculating Break-Even ROAS

This calculator is designed to make the process easy. You start by inputting some basic data:

• Product name
• Cost of goods (how much it costs you to produce or source the product)
• Shipping and additional costs
• Selling price of your product

Once you've filled in these details, the calculator does the rest. It calculates your total product costs, your product profits per item, and your product profit margins. From there, it can determine your break-even ROAS.

Real-Life Examples

Let's walk through a few examples to see how it works in action:

• PS5: This product has a high cost of goods and relatively low-profit margins. With a selling price of $398 and total product costs of $355, the profit per item is only $32, with a profit margin of 8.23%. This means the break-even ROAS is 12.16%, making it unsuitable for advertising on Google.
• Fidget Spinner: With lower costs and a higher profit margin of 42.24%, the break-even ROAS for this product is more achievable at 2.67%.
• T-shirt: Higher profit margins make this product more suitable for advertising, with a break-even ROAS of 243.06%.
• Luxury Sofa: With a substantial profit margin of 84%, the break-even ROAS for this product is even lower at 284.28%.

Using the Calculator

To get started, make a copy of the calculator and list each of your individual products. Input the relevant data for each product, and the calculator will automatically calculate the break-even ROAS for you. This way, you can focus your advertising budget on the most profitable products and maximize your return on investment.

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