Margin vs Markup, and Why the Difference Costs Money
A 50% markup is a 33% margin. Getting the two confused underprices products by a third, and the error…
Finds the ROAS, ACOS and cost per sale at which advertising breaks even for your margin, and checks a live campaign against it.
The Break-Even ROAS Calculator finds the ROAS, ACOS and cost per sale at which advertising breaks even for your margin, and checks a live campaign against it. It runs as plain JavaScript inside the page, which means there is no upload step, no queue and no size limit imposed by a server — the only limit is your own device.
| Break-even ROAS | 1 ÷ contribution margin |
|---|---|
| Break-even ACOS | EQUALS the contribution margin |
| At a 50% margin | 2× ROAS breaks even |
| At a 25% margin | 4× ROAS breaks even |
| ROAS × ACOS | Always 1 |
This tool uses break-even ROAS = price ÷ contribution margin, and break-even ACOS is the contribution margin as a percentage of price. The two are the same fact stated upside down. Every intermediate value is shown on screen, so the result can be checked by hand.
Overheads, salaries, returns and discounting sit below the contribution margin and are not modelled. Break-even here means the ad pays for itself, not that the business makes money.
A 50% markup is a 33% margin. Getting the two confused underprices products by a third, and the error…
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