Calculator
- Are ads profitable after refunds, COGS, and fees?
- What ROAS do you need to break even?
- How much revenue is required for a target ROAS?
- What CPA can you afford per order?
- Using gross revenue instead of net revenue.
- Ignoring refunds, shipping, and payment fees.
- Comparing channels without consistent attribution.
- Optimizing ROAS while contribution profit drops.
Example data table
Use this as a template for weekly channel checks. Numbers below are illustrative.
| Channel | Spend | Attributed Revenue | Orders | ROAS |
|---|---|---|---|---|
| Search | $900 | $3,150 | 45 | 3.50 |
| Social | $700 | $1,820 | 28 | 2.60 |
| Shopping | $420 | $1,470 | 19 | 3.50 |
| Creators | $250 | $650 | 11 | 2.60 |
| $80 | $520 | 12 | 6.50 |
ROAS = Revenue ÷ Spend.Formula used
AdjustedRevenue = GrossRevenue × (Attribution% ÷ 100)NetRevenue = AdjustedRevenue − Refunds − Discounts
ROAS = AdjustedRevenue ÷ AdSpendMER = AdjustedRevenue ÷ (AdSpend + OtherMarketing)ContributionProfit = NetRevenue − VariableCosts(ex ads)ProfitROAS = ContributionProfit ÷ AdSpendBreakEvenROAS = 1 ÷ ContributionMargin
ContributionProfit ÷ NetRevenue.
Variable costs exclude ads so you can see how much margin is available to fund marketing.
How to use this calculator
- Enter gross revenue attributed to ads for your chosen period.
- Adjust attribution if you want conservative or aggressive credit.
- Add refunds, discounts, COGS, and operational variable costs.
- Click Calculate to view ROAS, profit, and break-even targets.
- Export results as CSV or PDF for reporting.
ROAS versus MER in ecommerce decision-making
ROAS measures paid media efficiency: attributed revenue divided by ad spend. MER blends all marketing spend, so it reflects the full demand engine. If your store earns 10,000 in attributed revenue and ad spend is 2,000, ROAS is 5.0. If you also spend 500 on email tools and creators, MER becomes 10,000 ÷ 2,500 = 4.0. Using both prevents “high ROAS, low profit” decisions. Apply an attribution adjustment to keep reporting consistent across platforms.
Refunds and discounts change the real numerator
Gross revenue can overstate performance because refunds, returns, and promotions reduce what you keep. A 7% refund rate on 10,000 removes 700, and a 400 discount total pushes net revenue to 8,900 before costs. Input refunds as a percent or a fixed amount to model seasonality. Even a shift from 5% to 9% can erase a full ROAS point. When refund rates rise, the same ad spend produces lower ROAS even if traffic quality is steady.
Contribution profit connects ads to cash
Profit ROAS uses contribution profit as the numerator: net revenue minus variable costs excluding ads. This ties optimization to cash generation, not just revenue. With net revenue 8,900 and COGS at 35%, COGS is 3,115. Add shipping, platform fees, and processing fees, and contribution profit can swing by hundreds. Pair it with AOV to see whether price changes offset costs.
Break-even ROAS and allowable CPA
Break-even ROAS comes from contribution margin. If contribution margin is 25%, break-even ROAS is 1 ÷ 0.25 = 4.0. Each 1 in ad spend must drive 4 in adjusted revenue to avoid losing money. CPA adds an order-level view: with 80 orders and 1,200 ad spend, CPA is 15. Compare it to contribution profit per order to judge scaling headroom.
Using targets to plan budgets and scale
Targets turn reporting into planning. Set a target ROAS to estimate the revenue needed at current spend, then stress-test scenarios by changing refund rate, COGS, or shipping. Use Target Profit ROAS to model profit per ad dollar. Track targets by channel weekly, watch discounting and return spikes, then scale spend in steps as margins hold for cleaner cash forecasts.
FAQs
1) What does ROAS measure in this tool?
ROAS divides adjusted attributed revenue by ad spend. Adjusted revenue can be reduced for attribution, refunds, and discounts so the ratio reflects ecommerce reality, not just platform-reported gross sales.
2) How is Profit ROAS different from ROAS?
Profit ROAS uses contribution profit instead of revenue. It shows how many profit dollars you generate per ad dollar after variable costs like COGS, shipping, platform fees, and payment processing.
3) Should I use percent or fixed refunds/returns?
Use percent when refund rates are stable and you want quick scenario testing. Use a fixed amount when you already know the period’s refund total or you are modeling a specific return event.
4) Why does break-even ROAS change over time?
Break-even ROAS depends on contribution margin. Changes in COGS, discounting, shipping rates, processing fees, or tax settlements move margin up or down, so the ROAS required to avoid losses also changes.
5) What is the best way to set target ROAS?
Start from your break-even ROAS, then add a buffer for overhead and desired profit. Many teams test multiple targets, such as conservative, expected, and aggressive, and compare required revenue at the same spend.
6) How do the CSV and PDF exports work?
After you calculate, the export buttons download your results table from the browser. CSV is useful for spreadsheets, while PDF is formatted for sharing with stakeholders or attaching to weekly reports.