Know your number, then spend against it
Once you know what an order can afford, our ads management works to it: the right tracking first, then campaigns judged on profit, not on the platform's ROAS.
Free tool
Your ad platform's ROAS ignores what the product costs you, shipping, fees and returns, so a ROAS that looks healthy can still lose money. Enter your price and costs and we work out the ROAS you need to break even, the most you can pay per sale, and whether your current ads are profitable.
Break-even ROAS and profit calculator
Your numbers
Your results appear here as you type. Start with your price and what an order costs you, or fill the form with an example to see how it works.
Break-even ROAS
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Max cost per sale
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Left from each order
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Target ROAS
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Result
Are your current ads profitable?
Add your ad spend and the revenue your platform reports, and we will say whether you are making or losing money per order.
Where the money from one average order goes
Short and plain
How it works
Step 1
Enter your average order value and what each order costs you: product, shipping, fees and returns.
Step 2
Read your break-even ROAS and maximum cost per sale. Add a profit margin to see the ROAS you should aim for.
Step 3
Add your ad spend and the revenue your ad platform reports to see your real profit or loss per order.
Step 4
Copy the link to share your numbers with your team. The formulas are shown under the results.
Read this once
Why platform ROAS lies
It counts revenue, not profit
ROAS divides sales by ad spend. Product cost, shipping and fees never enter the sum, so a ROAS that looks healthy can still lose money when margins are thin.
It ignores returns
Platforms credit an order when it is placed. If some orders are refunded later, the sale stays in the platform's ROAS but the money is gone.
Two platforms can claim one sale
Each ad platform counts the sales it believes it caused. A customer who saw ads on two can be counted by both, so the totals can add up to more than you really sold.
Break-even is only zero profit
Reaching break-even pays for the ads and nothing else. To keep a margin you need a target ROAS above it, which is why this tool works that out too.
Check our maths
The formulas we use
- Revenue kept per order
price x (1 - return rate) - Product cost per order
product cost x (1 - return rate) when returned items are resold, otherwise the full product cost - Fees per order
price x fee % - Left per order (contribution margin)
revenue kept - product cost - shipping - fees - Break-even ROAS
price / left per order - Max CPA (cost per sale)
left per order - Target ROAS for a profit margin
price / (left per order - price x target profit %) - Profit or loss on your ads
orders x left per order - ad spend, where orders = reported revenue / price
Returns, shipping and fees are simple averages across all orders. If your costs vary a lot by product, run the tool once for each product group. Nothing here is a guarantee of results.
What to do next
Then what?
Also free
Good questions
Common questions
What is break-even ROAS?
It is the return on ad spend at which your ads pay for themselves and no more. Below it each sale loses money once product cost, shipping, fees and returns are counted. It is the order price divided by what an order leaves after those costs.
Why is my real ROAS lower than the platform's?
Ad platforms report the order value they credit to ads. They do not subtract product cost, shipping, payment fees or refunds, and they can credit the same sale to more than one platform. Your profit depends on what is left after your costs, which is why the break-even is higher than most people expect.
What is a good ROAS?
There is no one good number. It depends on your margin. A business that keeps half of each order can break even at 2x, while one that keeps a fifth needs 5x. That is why this tool works from your own numbers and offers no benchmark.
What does max CPA mean?
Maximum cost per acquisition is the most you can spend on ads to win one order and still break even. It equals what one order leaves after your costs. Spend less than that and each order makes a profit.
How do you handle returns?
We take the return rate off the revenue you keep. If returned items can be sold again, we also take that share off product cost. Shipping and payment fees are treated as spent on every order, because they are rarely refunded. If your case differs, adjust the numbers.
Is my data sent anywhere?
No. The calculator runs in your browser. If you copy the link, your numbers sit in the web address so whoever opens it sees the same figures, so do not share a link with figures you want private.
Rather have us do it?
We can set it up
The tools are free to use. If you would rather have the tracking, ads or website done and tested for you, send us the brief.
