Calculator Inputs
Use average order-level values. The page stays in a single-column flow, while the calculator fields switch to three columns on large screens, two on smaller screens, and one on mobile.
Example Data Table
These sample scenarios show how order economics affect allowable ad spend and ROAS targets.
| Scenario | AOV | Discount % | Refund % | Operating Costs | Break-Even Ad Spend | Break-Even ROAS | Target ROAS |
|---|---|---|---|---|---|---|---|
| Beauty Store | $85.00 | 12.00% | 3.00% | $36.47 | $36.09 | 2.01x | 2.29x |
| Apparel Brand | $140.00 | 18.00% | 9.00% | $65.93 | $38.54 | 2.71x | 3.72x |
| Home Goods Shop | $210.00 | 8.00% | 2.00% | $108.30 | $81.03 | 2.34x | 3.25x |
Formula Used
Discounted Sales = Average Order Value × (1 − Discount Rate)
If tax is included: Net Sales = Discounted Sales ÷ (1 + Tax Rate)
If tax is not included: Net Sales = Discounted Sales
Recognized Revenue = Net Sales Before Refunds × (1 − Refund Rate)
Payment Fee Cost = Net Sales Before Refunds × Payment Fee %
Platform Fee Cost = Net Sales Before Refunds × Platform Fee %
Operating Costs = COGS + Packaging + Shipping Subsidy + Fulfillment + Fixed Fees + Percentage Fees + Other Variable Costs
Contribution Before Ads = Recognized Revenue − Operating Costs
Break-Even ROAS = Recognized Revenue ÷ Contribution Before Ads
Target Profit = Recognized Revenue × Target Margin %
Required ROAS = Recognized Revenue ÷ (Contribution Before Ads − Target Profit)
This model assumes percentage-based payment and platform fees are charged on net sales before refunds. Adjust the other variable cost field if your return process adds extra handling expense.
How to Use This Calculator
- Enter your average order value before discounts.
- Add the average discount rate and expected refund rate.
- Include all per-order costs such as COGS, packaging, shipping, fulfillment, and fees.
- Check the tax box only if your listed selling price already includes tax or VAT.
- Set a target net profit margin if you want a stricter ROAS target than break-even.
- Enter conversion rate to estimate the highest CPC you can afford.
- Press the calculate button to view results above the form.
- Use the chart and export buttons to share the output with your team.
Frequently Asked Questions
1. What does break-even ROAS mean?
Break-even ROAS is the return on ad spend level where ad-driven orders produce zero net profit. It shows how much revenue each ad dollar must generate to avoid losing money.
2. Why is recognized revenue lower than order value?
The calculator reduces order value by discounts, removes included tax if selected, and subtracts expected refunds. That creates a more realistic revenue figure for ad planning.
3. What is the difference between break-even ROAS and target ROAS?
Break-even ROAS only protects you from losses. Target ROAS is stricter because it reserves room for the net profit margin you want to keep after paying variable costs and ads.
4. How do refunds change the result?
Refunds reduce recognized revenue, which lowers allowable ad spend and pushes required ROAS higher. Even a small increase in refund rate can materially hurt paid acquisition efficiency.
5. Should tax be included in revenue?
Usually no. Sales tax and VAT are pass-through amounts, not true operating revenue. If your displayed selling price includes tax, enable the checkbox so tax is removed automatically.
6. What is max CPC in this calculator?
Max CPC is the highest click cost you can tolerate based on your conversion rate and allowable ad spend per order. It helps connect ROAS targets to paid traffic bidding.
7. Why might the calculator show no feasible break-even ROAS?
That happens when operating costs already consume all recognized revenue. In that situation, the order is unprofitable before advertising, so any paid acquisition would deepen losses.
8. Should I use blended numbers or channel-specific numbers?
Use blended inputs for overall budgeting and channel-specific inputs for tactical optimization. Paid social, search, marketplaces, and email-driven orders often have very different unit economics.