The e-commerce calculator: know your numbers before you scale.
Break-even ROAS, the most you can pay per order, the ROAS you need for real profit, and what a customer is worth over a year. Put in your own numbers; everything updates as you type.
1. Your order
What an average order looks like, as your ad platform reports it.
2. Costs per order
Everything you pay for each order, before advertising.
3. Ads and fixed costs
Your current month, to see the full picture.
4. Goals and retention
What you want to keep, and how often customers come back.
Your numbers are saved in this browser only. Nothing is sent to us.
Where the money from one order goes
Your month at the current ROAS
Customer value (12 months)
What different ROAS levels would mean
| ROAS | CPA | Profit / order | Month profit |
|---|
Same ad spend, same costs. Yellow = your break-even, blue = your current ROAS.
How the numbers are calculated
order value ÷ (1 + VAT) × (1 − refund rate)net revenue − product cost − shipping − payment fees − other costsorder value ÷ contribution margincontribution margintarget CPA = contribution margin − (net revenue × target margin)
target ROAS = order value ÷ target CPAorders × contribution margin − ad spend − fixed costscontribution margin × orders per customer ÷ cost per orderHow to use it
- Use blended ROAS (MER) as your current ROAS: total revenue divided by total ad spend. Platform ROAS usually looks better than reality.
- Check break-even before you judge a campaign. A 2x ROAS is great for one brand and a loss for another. It depends entirely on your margin.
- Plan scaling on target ROAS, not break-even. Break-even keeps the lights on; the target is what pays you.
- Use the scenario table to set expectations. It shows what a lower ROAS at the same spend does to your month, which is what happens when you scale into colder audiences.
If the numbers don’t work
There are three ways to lower your break-even ROAS, and ads are only one of them:
- Raise order value. Bundles and quantity breaks raise the order without raising the cost of winning the customer. See our bundle offers guide.
- Lower costs per order. Product cost, shipping, packaging and payment fees all come straight off the margin.
- Bring customers back. Repeat orders don’t need a second ad click, which is why a healthy share of returning customers makes the first order easier to pay for. More on how the pieces fit on how we work.
FAQ
How do you calculate break-even ROAS?
Divide your average order value (as reported by the ad platform) by your contribution margin per order. The contribution margin is what’s left of an order after VAT, refunds, product cost, shipping, payment fees and other variable costs. At a 70 EUR order with a 30 EUR contribution margin, break-even ROAS is 70 / 30 = 2.33x.
What is the difference between break-even ROAS and target ROAS?
Break-even ROAS is where an order makes exactly zero profit after ads. Target ROAS is the ROAS you need to keep a chosen profit margin, for example 10% of net revenue. Target ROAS is always higher than break-even ROAS.
Should I include VAT in my ROAS calculation?
Your ad platforms usually report revenue including VAT and shipping, because that’s what the store sends them. This calculator takes the order value as reported and removes VAT before calculating margin, so the break-even ROAS it shows can be compared directly with the ROAS in Ads Manager.
What is MER?
MER, the marketing efficiency ratio, is total revenue divided by total ad spend across all channels. It’s also called blended ROAS. It’s more honest than the ROAS inside one ad platform, because it doesn’t depend on attribution.
What is a good contribution margin for a DTC brand?
As a rough guide, a contribution margin of 30% or more of net revenue before ads makes paid acquisition workable. Below that, brands usually need to raise order value (for example with bundles) or lower product and shipping costs before scaling ads.
What is a good LTV to CAC ratio?
3 to 1 is a common benchmark: a customer should bring in about three times their acquisition cost in contribution over their lifetime. The calculator uses 12 months of orders per customer and your contribution margin per order to estimate it.