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ROAS calculator
Work out your ROAS, the break-even ROAS your margins need, and the ROAS that hits your profit target. See how much each sale can cost in ads before it loses money.Your ROAS, break-even ROAS and profit after ads, in one place.
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- Break-even and target ROAS
- Profit after ad spend
- Most you can pay per sale
How it works
How the ROAS calculator works
- 01
Enter spend and sales
Add what you spent on ads and the sales those ads brought in, for the same period.
- 02
Add your costs per order
Average order value, product cost, shipping and packing, and payment fees. Together they set your margin before ads.
- 03
Read the verdict
You see your ROAS against your break-even and target ROAS, your profit after ads, and how that profit changes at other ROAS levels.
Reading the results
What the numbers mean
ROAS
Return on ad spend: sales from ads divided by ad spend. A ROAS of 4× means every 1 spent on ads brought back 4 in sales.
Break-even ROAS
The ROAS where your ads make zero profit. It is 1 divided by your margin before ads, so a 40% margin needs 2.5×.
Target ROAS
The ROAS that leaves the profit you want after ad costs. It is 1 divided by your margin minus your target profit.
Most you can pay per sale
Your profit per order before ads. If a sale costs more than this in ads, that order loses money.
Putting it to work
How to use the result
- 01
Set a floor for every campaign
Anything running below break-even for long enough to judge is losing money. If you use target ROAS bidding, set it from your target ROAS, not a guess.
- 02
Raise margin, not only ROAS
A bigger average order or a lower product cost lowers your break-even ROAS, so every campaign gets easier to run at a profit. Bundles and free-shipping thresholds help.
- 03
Check the numbers against Shopify
Ad platforms count the sales they think they caused. Compare them with your orders in Shopify Analytics, and track total sales against total ad spend (MER) as well.
What the calculator leaves out
- Uses one average order and one set of costs per order. Returns, repeat purchases, discounts and fixed costs such as staff and apps are left out, so treat the results as a guide and use your own numbers.
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FAQ
Questions about ROAS
What a good ROAS is, how to work out break-even ROAS, and how ROAS differs from ROI and MER.
Ask me about your storeWhat is a good ROAS for a Shopify store?
There is no single good number, because it depends on your margin. A store with a 50% margin breaks even at 2×, while a 25% margin needs 4×. Work out your break-even ROAS first, then aim above it.
How do I calculate ROAS?
Divide the sales from your ads by what you spent on them. 3,200 in sales from 1,000 of ad spend is a ROAS of 3.2×, sometimes written as 320%.
How do I calculate break-even ROAS?
Divide 1 by your margin before ad costs. If a 45 order leaves 23.88 after product cost, shipping and a 2.5% payment fee, your margin is about 53%, so your break-even ROAS is about 1.9×.
What is the difference between ROAS and ROI?
ROAS compares sales with ad spend. ROI compares profit with the money you put in. A ROAS of 3× can still lose money when margins are thin, which is why the calculator shows profit after ads too.
Should I include VAT in ROAS?
No. VAT is not yours to keep, so counting it makes ROAS look better than it is. Use sales and costs before VAT, and keep every number on the same basis.
What is MER?
MER, the marketing efficiency ratio, is total sales divided by total ad spend across every channel. It avoids two platforms claiming the same sale, so it is a good check on the ROAS each platform reports. See the MER glossary entry.