ROAS calculator
Work out the ROAS your store actually needs, from your own margins — then see what this month's spending really earned.
How we calculate
The calculator starts from the revenue your ad platform reports and takes off everything a sale costs before it reaches profit. Discounts come off the top line first, then refunds come off what is left — they compound, because a refunded order was already discounted. What remains is net revenue.
Cost of goods, fulfilment and payment processing are taken off next, each as a share of net revenue. What is left is contribution: the money a sale actually contributes before any advertising or overhead. Divided by the reported revenue, that gives your contribution margin — and because ROAS is measured against reported revenue too, the two figures line up.
Break-even ROAS is one divided by that margin. Target ROAS is one divided by the margin you have left after setting aside the net margin you want to keep — so a target you cannot reach at your current costs is reported as out of reach rather than as a number. If you add fixed costs, the calculator apportions the share you assign to this channel and shows a second break-even that carries them.
Order counts, cost per acquisition and break-even CPA come from your average order value. Everything is one month, in the currency you pick, and every figure is an estimate from the numbers you entered — not from your accounts.
Frequently asked questions
What is ROAS?
ROAS — return on ad spend — is the revenue an ad account reports divided by what it cost to run. Spend 2,000 and the platform reports 10,000 back, and your ROAS is 5×. It answers one question: how many times over did the advertising pay for itself in revenue?
It is a revenue figure, not a profit figure. Nothing in it knows what your products cost to make, pack, ship or refund — which is why the same 5× can be a strong month for one store and a losing one for the store next door.
What is a good ROAS?
There is no universal number, and the familiar "aim for 4×" is describing a store with a 25% margin rather than yours. A good ROAS is any ROAS comfortably above your break-even, and your break-even is set entirely by your margin: a store keeping 50 cents of every euro breaks even at 2×, a store keeping 20 cents needs 5× just to stand still.
So work out your break-even first. "Good" is then whatever clears it by the profit you want to take home — which is what the target ROAS above is for.
What is break-even ROAS?
The ROAS at which the advertising exactly pays for itself: every euro spent returns just enough contribution to cover that euro and nothing more. It is one divided by your contribution margin. A 40% margin breaks even at 2.5×, a 25% margin at 4×, a 15% margin not until 6.7×.
Contribution margin means what is left of the revenue after everything that scales with a sale — discounts, refunds, cost of goods, fulfilment, payment processing — and before rent, salaries, software and the rest of the overheads.
Why is my ROAS fine while the business still loses money?
Usually one of two things. Either the margin is thinner than assumed — discount codes and a high return rate quietly take a fifth off the top before any product cost is counted — or the ads are clearing their own break-even but nothing beyond it, leaving the overheads unpaid.
Add your monthly fixed costs under "More options" and the calculator shows the second, higher break-even: the ROAS at which the channel carries its share of the overheads too. That is the number a business runs on.
What is the difference between ROAS and ROI?
ROAS divides revenue by ad spend. ROI divides profit by what it cost to earn it. A 4× ROAS is not a 300% return — it is 300% more revenue than you spent, and how much of that survives depends entirely on your margin. At a 25% contribution margin, a 4× ROAS is exactly break-even: an ROI of zero.
What is the difference between ROAS and MER?
ROAS is per channel and comes from the platform's own attribution. MER — marketing efficiency ratio, sometimes called blended ROAS — is total store revenue divided by total marketing spend, taken from your own books.
They diverge because platforms each claim the same order. Add up the revenue three ad accounts report and you will often find more than the store actually took. If the reported revenue you entered above is higher than what your store recorded, trust the store and enter that instead.
How do discounts and returns change my ROAS?
They do not change the ROAS the platform shows you — it counts the order at checkout value and never hears about the refund. They change what that ROAS is worth, and they compound: a 10% discount and a 10% return rate leave 81% of the top line, not 80%.
This is why a fashion store with a 30% return rate and an electronics store with a 2% one cannot share a target. Put your real rates in and watch the break-even move.
How much can I afford to pay for an order?
Up to the contribution a single order leaves behind — your break-even CPA. It is your average order value multiplied by your contribution margin: a 65 basket at a 40% margin can afford 26 of acquisition cost before it starts losing money.
It is the same answer as the break-even ROAS, told one order at a time — and it is the version you can type straight into a bid cap or a target cost per action.
Which revenue figure should I enter?
The conversion value your ad platform reports for the same period as the spend, if you are judging a channel. Use your store's own revenue for the period, against total marketing spend, if you are judging the whole business — the maths is identical, and the second answer is the honest one.
Either way, use the same window for both boxes and use revenue before tax and before shipping charged to the customer.
Can I save or share my result?
Every input is written into the page's address as you change it, so copying the URL copies your scenario. Send it to a client or a media buyer, or paste it back next month, and the calculator opens on the same numbers.