Ecommerce ROAS Calculator
Calculate your real ecommerce ROAS after COGS, shipping, fees, discounts, and returns, then compare it with the break-even ROAS your store actually needs.
Enter your numbers
Campaign numbers
Costs per order
Your result
Current ROAS
4.71x
Break-even ROAS
2.00x
Margin per order
$990.00
Max CAC before overhead
$990.00
You are 2.71x above break-even. That gives you some room before returns or costs start to hurt profitability.
Estimated CAC right now: $466.67
Contribution margin: 50.0%
Quick check
If returns rise from 4% to 9%, your break-even ROAS moves to 2.13x.
What Is ROAS in Ecommerce?
Return on ad spend (ROAS) shows how much revenue your ads generate for every dollar you spend.
ROAS = Revenue from Ads / Ad Spend
If you spend $1,000 on ads and those ads bring in $4,000 in revenue, your ROAS is 4.0x. That number is useful, but it does not tell you whether the campaign is profitable. To answer that, you also need to include product costs, shipping, payment fees, discounts, and returns.
How This Ecommerce ROAS Calculator Works
This calculator compares your current ROAS with the break-even ROAS your store needs after variable order costs.
It uses:
- revenue from ads
- ad spend
- average order value
- cost of goods sold
- shipping and fulfillment costs
- payment fees
- discount rate
- return or refund rate
The result is a clearer view of campaign profitability than a basic ROAS calculator. Instead of only showing revenue efficiency, it shows whether your ads are leaving enough money after the order is fulfilled.
What Your Results Mean
| Result | What it means |
|---|---|
| Current ROAS is above break-even ROAS | The campaign is covering variable order costs |
| Current ROAS is below break-even ROAS | The campaign is losing money before fixed costs |
| Margin per order is low | Small changes in returns, discounts, or CAC can erase profit |
| Max CAC is low | The product may be hard to scale with paid ads |
Being slightly above break-even is not the same as being safe to scale. If your current ROAS is 3.2x and your break-even ROAS is 3.0x, a small increase in shipping costs or return rate can push the campaign below profit.
What Is a Good ROAS for Ecommerce?
There is no universal good ROAS. A good ROAS depends on your margins.
A store with a 60% contribution margin may be profitable at 2.0x ROAS. A store with a 20% contribution margin may need 5.0x or higher just to break even.
Use your break-even ROAS as the floor. Industry benchmarks can be useful for context, but your own product costs and fulfillment costs are what decide whether a campaign is profitable.
Example: High ROAS, Low Profit
| Input | Value |
|---|---|
| Ad spend | $3,000 |
| Revenue from ads | $12,000 |
| Reported ROAS | 4.0x |
| Variable costs | 55% of revenue |
| Break-even ROAS | 4.5x |
At first glance, a 4.0x ROAS looks strong. But if the store needs 4.5x to cover costs, the campaign is still unprofitable. This is why ecommerce ROAS should be checked against margin, not just revenue.
Common ROAS Mistakes to Avoid
- Treating ad platform ROAS as profit
- Ignoring shipping, fees, discounts, and returns
- Scaling a campaign that is only slightly above break-even
- Comparing your ROAS with benchmarks before checking your own margins
Frequently asked questions
What is a good ROAS for ecommerce?
A good ROAS for ecommerce typically starts at 4x — $4 in revenue for every $1 in ad spend. But the right number depends on your margins. Brands with thin margins may need 6x or higher to be profitable; high-margin products can break even at 3x. Calculate your break-even ROAS first before using industry averages as a target.
What is the difference between ROAS and ROI?
ROAS measures revenue generated per dollar of ad spend (Revenue ÷ Ad Spend). ROI measures net profit after all costs. A campaign can show strong ROAS and negative ROI if product costs, shipping, fees, and returns eat into the margin — which is why break-even ROAS is a more useful benchmark than ROAS alone.
How do you calculate ROAS?
ROAS = Revenue ÷ Ad Spend. If you spent $1,000 on ads and generated $4,000 in revenue, your ROAS is 4x (400%). For an accurate picture, also calculate your break-even ROAS by factoring in COGS, shipping, platform fees, and return rates — otherwise a strong ROAS can still mean a loss.
What is break-even ROAS?
Break-even ROAS is the minimum ROAS needed to cover all variable costs — product cost, shipping, platform fees, discounts, and returns — without making or losing money. If your break-even is 5x and your campaign is hitting 4x, you're losing money even though the ROAS looks reasonable.
What does 4x ROAS mean?
A 4x ROAS means you're generating $4 in revenue for every $1 spent on ads. Whether that's profitable depends on your margins. If your break-even ROAS is 5x, a 4x return means you're losing money on each sale despite the campaign appearing to perform.
Can a high ROAS still mean you're losing money?
Yes. ROAS only measures revenue against ad spend — it ignores product costs, shipping, fees, discounts, and returns. A campaign showing 5x ROAS can still be unprofitable if those variable costs are high. That's why break-even ROAS is a better benchmark than a raw ROAS target.
What is target ROAS (tROAS) in Google Ads?
Target ROAS is a Google Ads bidding strategy where you set a revenue return target and Google adjusts bids automatically to hit it. Setting an accurate tROAS requires knowing your break-even first — otherwise you may be optimising for a return that still loses money after costs.
How do I improve my ROAS?
To improve ROAS: increase average order value through upsells or bundles, reduce COGS or fulfillment costs, tighten audience targeting, pause low-performing ad sets, or improve landing page conversion rates. Which lever to pull depends on whether you're close to break-even or far from it.
More Free Tools for You
Break-Even ROAS Calculator
Calculate the ROAS your store needs before a campaign can cover order costs.
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Ecommerce Contribution Margin Calculator
See how much money each order leaves for CAC, overhead, and profit.
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Ecommerce LTV:CAC Calculator
Check whether repeat purchases make your acquisition cost sustainable.
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Track profitable ROAS with live store and ad data
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