Ads and ROAS profit calculator

Ads & ROAS Profit Calculator

See if your ads are truly profitable. This Ads & ROAS profit calculator for small ecommerce sellers shows your break-even ROAS, compares it to your actual ROAS, and helps you find a target ROAS and max CPC that your margins can support.

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Calculator

Check if your ROAS is really profitable

Use this break-even ROAS calculator for ecommerce to compare your order margin before ads with either actual campaign ROAS or a planned target ROAS and max CPC.

Calculation mode

Shared product economics

These inputs drive gross margin before ads, which is the foundation for break-even ROAS and target ROAS decisions.

Currency

Display only. This does not convert between currencies.

Expected average order value

Revenue per order before ads.

Product cost per order (COGS)

Total product cost per order, for example the cost of items sent in one order.

Platform fee %

Example: Etsy, Amazon, marketplace, or platform commission.

Payment fee %

Example: payment processing rate.

Fixed fee per order

Example: flat processing fee.

Shipping charged to buyer

Shipping cost to you

Plan a new campaign

Estimate conversion rate and optionally enter your own target ROAS. If target ROAS is blank, the calculator suggests one at 1.3x break-even ROAS.

Expected conversion rate from click to order %

Example: 2 means 2% of clicks become orders.

Target ROAS optional

Leave blank to auto-suggest a target above break-even ROAS.

Results

Planned ROAS at a glance

Before ads

Order economics before any ad spend is applied.

Gross margin before ads

35.9%

Gross profit per order before ads

A$17.95

Break-even ROAS

2.79x

Break-even ROAS %

278.6%

Campaign planning

Shows the target ROAS, ad spend per order, and max CPC your margins can support.

Target ROAS

3.62x

Target ROAS %

362.1%

Target source

Suggested target

Max ad spend per order

A$13.81

Profit per order after ads

A$4.14

Max CPC

A$0.28

Planning guidance

At this target ROAS and conversion rate, you can afford up to A$0.28 per click. If your actual CPC is higher, you are likely to miss your profit target.

Break-even ROAS is 2.79 and target ROAS is 3.62. That allows about A$13.81 ad spend per order before ads become too expensive for this goal.

Things to review

You subsidise shipping on each order, which lowers gross margin before ads.

Breakdown

Order economics behind the ROAS calculation

Metric	Value
Average order value	A$50.00
Product cost per order	A$20.00
Variable fees per order	A$3.75
Fixed fee per order	A$0.30
Shipping net per order	-A$8.00
Total costs before ads	A$32.05
Gross profit before ads	A$17.95
Gross margin before ads	35.9%
Break-even ROAS	2.79x

This ads and ROAS profit calculator for Etsy and Shopify sellers starts with your order margin before ads, then uses that margin to judge break-even ROAS, target ROAS, and max CPC more realistically.

How this is calculated

How your current ads and ROAS profit numbers are calculated

This live walkthrough updates from your current inputs so you can see how gross margin before ads turns into break-even ROAS, campaign profitability, target ROAS, and max CPC.

Open the live calculation walkthroughUses your current AOV, cost, fee, shipping, and ad inputs.

Input

Current inputs: AOV = A$50.00, product cost per order = A$20.00, platform fee = 5.0%, payment fee = 2.5%, fixed fee = A$0.30, shipping charged = A$0.00, shipping cost = A$8.00. Expected conversion rate = 2.0%, target ROAS = 3.62x.

Formula

Variable fees per order = combined fee rate x average order value = 0.075 x A$50.00 = A$3.75.

Formula

Shipping net per order = shipping charged - shipping cost = A$0.00 - A$8.00 = -A$8.00.

Result

Total costs before ads = product cost + variable fees + fixed fee + minus shipping net = A$20.00 + A$3.75 + A$0.30 + A$8.00 = A$32.05.

Result

Gross profit before ads = average order value - total costs before ads = A$50.00 - A$32.05 = A$17.95.

Result

Gross margin before ads = gross profit before ads / average order value = A$17.95 / A$50.00 = 35.9%.

Result

Break-even ROAS = 1 / gross margin as decimal = 1 / 0.359 = 2.79x.

Result

Max ad spend per order = average order value / target ROAS = A$50.00 / 3.62x = A$13.81.

Result

Max CPC = max ad spend per order x conversion rate decimal = A$13.81 x 0.020 = A$0.28.

Meaning

In plain English: this answers "how to calculate target ROAS from profit margin" and "max CPC calculator from ROAS and conversion rate" using your current unit economics instead of a generic ad benchmark.

How it works

How the Ads & ROAS Profit Calculator works

This break-even ROAS calculator for ecommerce starts with order margin before ads, turns that margin into a break-even ROAS, then compares it with real or planned campaign performance.

ROAS means revenue divided by ad spend

ROAS is a simple ratio: revenue from ads divided by ad spend. A ROAS of 3.0 means the campaign produced three dollars in revenue for every one dollar spent on ads.

Break-even ROAS comes from your margin before ads

Break-even ROAS equals 1 divided by gross margin before ads, using gross margin as a decimal. That means thin-margin products need much stronger ROAS to avoid losing money.

A ROAS that looks good can still lose money

If product cost, fees, and shipping eat most of the order value, a campaign can show a decent-looking ROAS while still destroying profit. That is why this calculator starts with order economics first.

Why this matters

A campaign can look healthy on headline ROAS while still losing money if costs, fees, and shipping leave too little margin before ads. That is why break-even ROAS is the more useful benchmark for small sellers.

Use cases

When to use this Ads & ROAS Profit Calculator

Use it whenever you need a clearer answer to questions like whether a campaign should keep running or what ROAS target a new launch can realistically support.

Check a running Meta or Google Ads campaign and see whether it is actually profitable.
Decide if Etsy Ads are worth it for a low-margin or handmade product.
Set a target ROAS and max CPC before launching a new product campaign.
Answer questions like "What ROAS should I aim for?" and "Can I afford this CPC?".

FAQ

Ads, ROAS and profit FAQs

Short answers to the ROAS and ad-profit questions small ecommerce sellers ask before they increase budgets or launch new campaigns.

What is ROAS and how is it calculated?

ROAS, or Return on Ad Spend, is revenue from ads divided by ad spend. A ROAS of 3.0 means you made 3 dollars in tracked revenue for every 1 dollar spent.

What is break-even ROAS?

Break-even ROAS is the ROAS where your gross profit from orders equals your ad spend, so you make zero profit and zero loss. It is calculated as 1 divided by gross profit margin, using margin as a decimal.

How do I know if my ROAS is good?

Compare your actual ROAS to your break-even ROAS. If it is lower, you are losing money. If it is equal, you are breaking even. If it is higher, you are profitable. Many brands aim for a target ROAS that sits above break-even.

What is the difference between ROAS and ROI on ads?

ROAS compares revenue to ad spend. ROI on ads compares profit to ad spend and accounts for product costs, fees, and shipping. This calculator shows both so you can judge campaigns more realistically.

How do I calculate max CPC from ROAS and conversion rate?

Once you know your max ad spend per order, multiply it by your expected conversion rate to get max CPC. For example, if you can spend $20 per order and 2% of clicks convert, your max CPC is 20 multiplied by 0.02, which is $0.40.

Can I use this calculator for Etsy Ads, Amazon PPC and Meta or Google Ads?

Yes. Enter your own average order value, costs, fees, and tracked revenue from each ad platform. The underlying ROAS and margin maths works the same.

Related tools

Connect ad economics back to pricing, discounts, and break-even work

Ads are only one layer of profitability. These tools help connect ROAS decisions back to product cost, tax-aware margin, discount strategy, wholesale pricing, and break-even planning.

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