Many shop owners run ads on imported 1688 goods without knowing the unit volume or ROAS they need to break even. Without that number, ad spend is just a cost with no reference point to judge whether a campaign is working or bleeding money.
Why the math is harder for imported goods
Products sourced from 1688 carry multiple cost layers before they go live on a platform. Unlike local goods with simple, fast-turnaround costs, every imported unit already absorbs: the 1688 product price, domestic China freight to the consolidation warehouse, freight to Vietnam, customs and clearance fees, order-agent service fees if you use one, and a shrinkage allowance for defective units.
When you layer ad spend on top of all that, break-even is no longer a simple number. Each order sold must cover the full landed cost, the platform fee, and the ad cost allocated to that order. Miss any one layer in your calculation and the break-even target you set will be wrong. End of month, margin is still negative and it is not obvious why.
Build the real landed cost first
The first step is getting the true cost of one unit, not just the price on 1688.
Factory price in CNY. This is the starting point. Convert to VND at the current rate, around VND 3,600 per yuan as a rough reference, but rates shift so check before you calculate.
Freight to Vietnam. Standard routes (road or sea) from a China consolidation warehouse run roughly 18 to 30 days, with costs that vary by product type and carrier. Freight is charged on actual weight or volumetric weight (length x width x height in cm divided by 6,000), whichever is higher. Light, bulky goods almost always hit the volumetric rate, which can be significantly higher than their actual weight suggests.
Agent and customs fees. If you order through an agent service, expect a few percent on the goods value. Customs handling fees add another layer, and the exact amounts depend on the service you use.
Shrinkage. Not every shipment arrives intact. Fragile or inconsistent-quality goods can lose 2 to 5 percent to breakage or defects. Spread total shipment cost across units actually received, not units ordered.
Add all of that up and divide by units received. The result is your real landed cost per unit (COGS).
Identify the platform fee on each order
Every platform keeps a cut of revenue before the money reaches you. The rate differs by platform, category, and shop tier, so check the seller center directly for your specific situation. Beyond the commission, there are often payment processing fees, promotional program fees, and in some cases shipping subsidy fees that the platform recoups from sellers.
The most reliable method: pull a completed-order statement from the platform, read every deduction line, and divide total deductions by the selling price. That number reflects actual fees more accurately than any published rate card.
Call the total platform take-rate F (for example, 0.12 if the platform keeps 12%).
Calculate break-even before ads enter the picture
Before bringing ads in, know your natural break-even first.
With selling price P, landed cost COGS, and platform fee rate F:
Gross profit per order = P x (1 - F) - COGS
Natural break-even is when this equals zero. If gross profit is positive, you have a cushion to absorb ad costs. If it is already negative before any ads, running ads only accelerates the loss.
Quick example: Selling price 180,000 VND. COGS after all layers is 100,000 VND. Platform fee 12%.
Gross profit = 180,000 x (1 - 0.12) - 100,000 = 158,400 - 100,000 = 58,400 VND
This is the pool available to absorb ad cost. If ad spend per order stays below 58,400 VND, there is positive margin left.
Add ads: calculating break-even ROAS
ROAS (Return on Ad Spend) is the revenue you generate per unit of ad spend. ROAS = revenue / ad spend. But the ROAS you need to break even is not an arbitrary target. It is derived from the specific cost structure of each SKU.
Break-even ROAS formula:
Break-even ROAS = P / (P x (1 - F) - COGS)
Using the example above: P = 180,000, COGS = 100,000, F = 0.12.
Break-even ROAS = 180,000 / (180,000 x 0.88 - 100,000) = 180,000 / 58,400 = 3.08
That means: for every 1 VND spent on ads, you need to generate at least 3.08 VND in revenue just to break even, with no profit yet. Any ROAS above 3.08 starts producing margin from ads. Below 3.08, every ad-driven order loses money.
Why break-even ROAS differs across SKUs
Two products at the same 180,000 VND selling price but with different COGS land at completely different break-even thresholds.
SKU A: COGS = 80,000 VND, F = 12%. Gross profit = 180,000 x 0.88 - 80,000 = 158,400 - 80,000 = 78,400 VND. Break-even ROAS = 180,000 / 78,400 = 2.30
SKU B: COGS = 120,000 VND, F = 12%. Gross profit = 180,000 x 0.88 - 120,000 = 158,400 - 120,000 = 38,400 VND. Break-even ROAS = 180,000 / 38,400 = 4.69
Same selling price, but SKU B needs nearly double the ROAS of SKU A to break even on ads. If you set a single ROAS target across all SKUs in your shop, you will keep putting ad budget into SKU B without realizing it is losing money on every sale.
This is why break-even ROAS must be calculated per SKU, not averaged across the whole shop.
Thin-margin SKUs: should you run ads at all
A break-even ROAS of 5 or 6 does not make a SKU impossible to advertise, but it demands a clear-eyed view of what is realistic.
ROAS of 5 to 6 is a hard threshold to sustain consistently in most commodity categories on TikTok Shop or Shopee. Ads tend to work best when break-even sits in the 2 to 3 range, giving campaigns room to optimize while still leaving a margin cushion.
When break-even ROAS is high, three adjustments are more practical than grinding away at a thin-margin SKU:
- Raise the selling price if the market allows. A slightly higher price combined with better positioning (sharper photos, stronger copy, more reviews) can lower break-even ROAS meaningfully.
- Reduce COGS. A larger order quantity can unlock a better factory price, or a different shipping route can cut freight.
- Reduce the fee take-rate. Some platforms negotiate, or offer lower-fee tiers for shops that hit certain volume thresholds.
If none of those moves is available, this is an ads-hostile SKU. Sell it if it moves organically, but do not allocate ad budget to it.
Track and adjust weekly
Calculating break-even ROAS once is not enough. COGS shifts when the exchange rate moves or freight rates rise. Platform fees change with promotional programs. Selling prices adjust under competitive pressure.
With each new import batch, recalculate COGS. Each month, verify the actual platform fee rate from a real statement rather than the rate card. When a SKU's break-even ROAS climbs noticeably, that is a signal to audit the cost structure or scale back ad budget before spending further.
Managing ads against a break-even ROAS number, rather than going by feel, tells you whether you are generating margin or quietly drawing down capital without noticing.
Bottom line
Break-even ROAS is the one number to know before running ads on any imported SKU. It comes from selling price, real landed cost across every fee layer, and the platform's take-rate. If actual campaign ROAS stays below that threshold, every sale costs you money regardless of what color the dashboard shows. Calculate it before you launch, not after the budget runs out.