How much you can spend on ads without losing money (margin and break-even ROAS)
A campaign that sells is not the same as a campaign that makes money. You can get plenty of orders and lose money on each one if the ad costs more than the sale leaves you. To know how much you can pay per order without losing, you only need three simple calculations. Here they are, with two worked examples.
1. The contribution margin of an order
This is what an order leaves you before paying for ads. It is worked out like this:
Contribution margin = price excluding VAT − product cost − shipping you pay − payment gateway fee
The price goes in without VAT (IVA) because the VAT is not yours: you charge it to the customer and pay it over to the tax authority. At the Spanish standard rate of 21%, the price without VAT is the price divided by 1.21.
This margin is the money you have to pay for the ad that brought the order in. Whatever is left after paying for it is your profit on that order, before the fixed costs of the business.
2. Maximum CPA: what you can pay per order
CPA (cost per acquisition) is what it costs you in ads to get one order: ad spend divided by the orders it brought in. Your maximum CPA is the one that leaves you at zero:
Maximum CPA = contribution margin per order
Pay less per order and you make money. Pay more and every sale costs you. It is your break-even point: no profit, no loss.
3. Break-even ROAS
ROAS (return on ad spend) is how much you sell for every euro you spend on ads: sales attributed to the ads divided by ad spend. A ROAS of 3 means €3 of sales for every euro of ads.
Your break-even ROAS is the minimum you need so as not to lose money:
Break-even ROAS = 1 ÷ margin on sales excluding VAT
where the margin on sales is the contribution margin divided by the price excluding VAT. If your margin is 50%, you need a ROAS of 2: for every euro of ads you have to sell €2 excluding VAT to earn it back.
Example 1: a €49.90 product
These figures are examples. They are not real prices or fees from any company.
| Item | Calculation | Amount |
|---|---|---|
| Price including VAT (21%) | What the customer pays | €49.90 |
| Price excluding VAT | €49.90 ÷ 1.21 | €41.24 |
| Product cost | − €15.00 | |
| Shipping you pay | − €4.50 | |
| Payment gateway fee (example) | − €1.00 | |
| Contribution margin = maximum CPA | €41.24 − €15.00 − €4.50 − €1.00 | €20.74 |
| Margin on sales excluding VAT | €20.74 ÷ €41.24 | 50.29% |
| Break-even ROAS (sales excluding VAT) | €41.24 ÷ €20.74 | 1.99 |
| Break-even ROAS (sales including VAT) | €49.90 ÷ €20.74 | 2.41 |
You can pay up to €20.74 in ads per order. If you spend €500.00 in a month and get 30 orders, your CPA is €16.67 (€500.00 ÷ 30). That is below the maximum, so you make money: 30 orders × €20.74 = €622.20 of margin, minus €500.00 of ads, leaves you €122.20.
Seen through ROAS: those 30 orders add up to €1,237.20 excluding VAT. Divided by €500.00, the ROAS is 2.47, above the 1.99 you need.
Example 2: a €24.90 product
Again, the figures are examples. Shipping costs the same, but the product is cheaper.
| Item | Calculation | Amount |
|---|---|---|
| Price including VAT (21%) | What the customer pays | €24.90 |
| Price excluding VAT | €24.90 ÷ 1.21 | €20.58 |
| Product cost | − €9.00 | |
| Shipping you pay | − €4.50 | |
| Payment gateway fee (example) | − €0.62 | |
| Contribution margin = maximum CPA | €20.58 − €9.00 − €4.50 − €0.62 | €6.46 |
| Margin on sales excluding VAT | €6.46 ÷ €20.58 | 31.39% |
| Break-even ROAS (sales excluding VAT) | €20.58 ÷ €6.46 | 3.19 |
| Break-even ROAS (sales including VAT) | €24.90 ÷ €6.46 | 3.85 |
Here you can only pay €6.46 per order. If you spend €250.00 and get 30 orders, your CPA is €8.33: more than each sale leaves you. The margin on the 30 orders is €193.80, and the ads cost €250.00, so you lose €56.20.
The interesting part is the ROAS: 30 orders add up to €617.40 excluding VAT, which divided by €250.00 also gives a ROAS of 2.47. The same ROAS as in the first example, and here you lose money. A ROAS is neither good nor bad on its own: it depends on your margin.
Things to keep in mind
- Break-even means zero, not profit. If you want to make, say, €5.00 per order, take that €5.00 off the contribution margin before working out your maximum CPA.
- Fixed costs are missing. The contribution margin does not include your store subscription, your software or your time. Those have to come out of what is left after ads.
- Returns lower your margin. If one order in ten comes back, your real margin per order is lower than the one in the table.
- The sales in your ads dashboard are the ones the platform credits to itself, under its own rules. Compare them with your store's orders for the same period.
- Each product has its own break-even. If you sell products with very different margins, work it out for each one, or for your average order.
To run the numbers with your own figures, use the order profit calculator. If you want to see what you keep each day with ads already taken off, you can try Plentia free for 14 days, no card needed.
Sources
- Spanish Tax Agency (AEAT) · Tipos impositivos en el IVA · checked on 26/09/2026
- BOE · Law 37/1992 on Value Added Tax (article 90) · checked on 26/09/2026