Break Even ROAS for Coffee Subscriptions in Singapore: The Number to Beat

What Break-Even Return Means

Break-even ROAS is the advertising return at which a subscription’s realized revenue covers its ad spend plus every cost that rises with that order. Include coffee and packaging, fulfilment, payment-processing fees, refunds or returns where applicable, taxes, and other variable costs. Exclude rent, salaries, software subscriptions, and other fixed overheads unless they change directly with each additional order.

Use revenue consistently. For a Singapore store, decide whether your calculation uses prices before or after GST and apply that treatment to every order. The current GST rate in Singapore is 9%, according to the Inland Revenue Authority of Singapore. If GST is collected and remitted, it generally should not be treated as available revenue for contribution; the important point is to avoid mixing GST-inclusive revenue with GST-exclusive costs (Source: Inland Revenue Authority of Singapore).

The basic logic is: break-even ROAS = revenue required to cover variable costs and advertising ÷ ad spend. A campaign below this return destroys contribution before fixed overheads; a campaign above it leaves contribution to help cover those overheads and profit. Use the break-even ROAS calculator to test the calculation with your own cost assumptions. ORVX uses delivered orders for realized revenue, excluding returned and cancelled orders.

Build the Margin Behind the Number

Start with one delivered subscription order, not the advertised price. Record the amount actually collected, product cost, packaging, fulfilment and shipping, payment or platform fees, discounts, refunds and other costs that rise when that order is sold. Exclude rent, salaries, software subscriptions and other fixed business costs. For a GST-registered Singapore store, separate GST from customer-inclusive prices: divide the GST-inclusive amount by 1.09 to obtain the pre-GST revenue base. The Inland Revenue Authority of Singapore states that the current GST rate is 9%/basics-of-gst/current-gst-rates). If your displayed price excludes GST, use the pre-GST price directly and treat collected GST as tax payable, not revenue (Source: Inland Revenue Authority of Singapore).

Then calculate contribution before advertising: pre-GST realized revenue minus those variable costs. Break-even ROAS is realized revenue divided by the contribution available for advertising. Use delivered orders only; a cancelled or returned order should not inflate the numerator. The break-even ROAS calculator helps apply the same inputs consistently. ORVX calculates realized revenue from delivered orders, models product cost, and reports contribution after advertising at product and collection level.

Read Platform Numbers Carefully

Reported ROAS is the advertising platform’s attributed conversion value divided by ad spend. Use it to manage delivery within that platform: compare the reported figure with your break-even ROAS before increasing spend. Its revenue attribution depends on the platform’s selected attribution settings, so do not treat it as the store’s complete return.

Blended return, often called MER, is total realized store revenue divided by total advertising spend. It includes revenue not assigned to a particular campaign or channel. Use it for the business-level question: after all paid channels are considered together, is advertising producing enough revenue to support the store? ORVX tracks MER and attributed ROAS separately, so the two figures can be compared without treating them as interchangeable.

Contribution after advertising goes one step further: realized revenue less variable order costs and advertising spend. Use this to decide whether a product or collection is adding money after ads, not merely generating attributed sales. For illustration only, a campaign can show 3.0 ROAS yet reduce contribution if fulfilment, product cost and discounts consume the margin. Check the arithmetic with the break-even ROAS calculator, then inspect product- or collection-level contribution before acting.

New Customers and Repeat Customers

New-customer ROAS measures the first order’s realized revenue against acquisition spend. It is useful when deciding whether to scale or reduce prospecting, but it does not show whether the customer will repay acquisition cost over time. A subscription renewal has no new acquisition spend attached, although coffee, packaging, fulfilment, shipping and other order-linked costs still apply.

For illustration only, suppose a first order collects $32, incurs $12 of variable costs, and follows $15 of ad spend. First-order ROAS is $32 ÷ $15 = 2.13, while contribution after advertising is $32 − $12 − $15 = $5. If that customer later makes two identical renewals, those renewals add $20 each before any other customer-specific costs. Whether the customer has then repaid acquisition spend, and the resulting cumulative contribution, should be calculated from your own order-linked costs, renewals and acquisition spend.

Customer payback asks when cumulative contribution recovers acquisition cost, so use it when judging acquisition efficiency over time. Cohort contribution groups customers acquired in the same period and shows the combined result after subsequent orders, refunds and costs. Use it for budget and channel decisions; use first-order ROAS for immediate campaign monitoring. A break-even ROAS calculator handles the first-order calculation, while customer-level profitability and repeat behaviour require your own store data.

How to Read the Worked Example

Read the worked example from the revenue line downward. Start with realized revenue: use the amount collected for the delivered subscription order, rather than the listed price or a platform’s attributed value. Then locate each variable-cost line, coffee, packaging, fulfilment, shipping and any other cost that changes with the order. The tax line is separate; Singapore’s current GST rate is 9% (Inland Revenue Authority of Singapore), but use the tax treatment and figure shown in the example rather than applying GST twice (Source: Inland Revenue Authority of Singapore).

Next, find ad spend. The example subtracts the listed variable costs and tax from realized revenue to show the amount available for advertising, then relates that amount to ad spend to produce the break-even ROAS. Read the final result as the required revenue for each dollar of advertising: an actual ROAS below it does not cover the included costs, while an actual ROAS above it leaves contribution after advertising. Keep the currency and order scope consistent when applying the result to your own store.

Setting a Target for Coffee Subscription Campaigns

Set separate rules for each decision. For acquisition, use a minimum new-customer ROAS target when you need a fast campaign-control signal: reduce or stop spend when first-order ROAS stays below the break-even threshold, and consider scaling only when it clears the threshold with a buffer. This rule is incomplete if the first order is deliberately low-margin and the business depends on renewals.

For renewals, ROAS is usually the wrong control measure because there may be little or no acquisition spend to assign. Use contribution after fulfilment, payment and other variable costs, then monitor payback: how many delivered orders are needed to recover acquisition cost. For the business-level view, use blended performance such as MER alongside attributed ROAS. MER tests total store revenue against total ad spend; it catches spend or conversions that platform attribution misses. A practical target therefore has three layers: acquisition ROAS, customer payback, and blended contribution. Compare your inputs in the break-even ROAS calculator, then set thresholds from your own order economics.

A defensible break-even ROAS is a cost-based operating threshold, not a universal benchmark. Recalculate it when prices, fulfilment, payment costs, tax treatment or subscription economics change, then compare platform reporting with contribution and payback before changing campaign budgets.