The 2.5x markup rule and your break-even ROAS

A 2.5x markup, selling a product for two and a half times what it costs you delivered, leaves 60% of the price to pay for everything else, so your ads must bring in about 1.67 times what they cost just to break even on that product. Fees, refunds and discounts push that line higher, and the ROAS you compare it with is usually the ad platform's own.

The rule comes from Ac Hampton's beginner dropshipping video, published on YouTube on 29 September 2026: "I want to see at least two and a half times what I can purchase a product for versus what I can sell it for." The video works backwards from a competitor's price of $36.99, divided by 2.5, to the most it would pay a supplier, then lands the product for $6.58 plus $3.85 shipping and prices it at $29.99. That is a sensible filter for choosing products. It is not yet a number you can run ads against.

Is a 2.5x markup enough to run ads?

It can be, once you know what it leaves. Break-even ROAS is the price divided by what is left of it after the landed cost, the product plus the shipping to your customer:

break-even ROAS = price / (price - landed cost)

With the markup alone, that is the markup divided by the markup minus one:

The video's own product clears the rule. $10.43 landed and $29.99 on the page is a markup of about 2.9x, which leaves $19.56 of each order and a break-even ROAS of about 1.53, before anything else comes off. The break-even ROAS calculator does the same sum with your numbers.

What the markup leaves out

Four costs come out of every order before the ads are paid for:

1. Payment fees. A card fee is a share of the price plus a fixed amount per order. The Shopify fee calculator shows yours by plan.
2. Refunds and returns. A refunded order gives the price back and rarely the product. The return rate calculator turns your rate into a cost per order.
3. Discounts. A discount comes off the price, not the cost. Twenty percent off a 2.5x markup leaves a 2x markup, and the break-even ROAS rises from 1.67 to 2.00. The bundle deals and discount timers that come with a ready-made theme count here too.
4. Apps and subscriptions. Fixed monthly costs do not change the sum per order, but the margin that is left has to cover them.

Say fees and refunds take $2.50 from each $29.99 order in the video's example; use your own figure. What is left falls from $19.56 to $17.06, and the break-even ROAS rises from 1.53 to 1.76. The contribution margin calculator keeps that sum current as the costs change.

Which ROAS to hold it against

The break-even is a line. What you hold against it matters as much. Ads Manager reports ROAS on the purchases Meta counts inside its attribution window, after a click or a view, and a purchase counted there would not always have been lost without the ad.

For a new store with no other traffic, most orders do come from the ads, and the platform's number will not be far off. The gap opens as the store grows: repeat buyers, email, people who search the name weeks after an ad. Then a reported ROAS of 1.9 against a break-even of 1.76 can hide a loss. Two checks keep it honest:

Compare the platforms' total with your store's. If Meta and Google together claim more revenue than the store took, the ad platform over-reporting checker shows by how much.

Track the whole store's ratio. Revenue divided by total ad spend, the blended ROAS, cannot count a sale twice. If it sits under your break-even while every campaign looks fine, the ads are not paying for themselves.

Where a read fits

Later, once you sell through two or more channels and have a few months of GA4 history, a causal attribution read like Causality Engine's can show which of them cause the sales you are paying for. It reads the GA4 Attribution paths export and shows what each channel caused next to what last-click gave it, with Direct split back to the channels that sent those buyers. Every channel gets a data-health score from 0 to 100 and a next step. It takes 1 to 2 minutes and costs EUR 99 once per upload, excluding VAT, with a full refund within 30 days, no questions asked. The first finding is free: your browser works out how many days buyers who saw two or more channels take to convert, and the file never leaves your machine.

Sources, accessed 30 September 2026: Ac Hampton, "The ONLY Way to Start Dropshipping in 2027 (For Beginners)" (YouTube, 29 September 2026). The rule is quoted from the video's transcript; the prices and costs are the video's, and the fee and refund figure is an example.

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