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ROAS calculator: is your advertising making money?

Work out ROAS, break-even ROAS and the most you can pay for an order, from your own margin, with delivery, cash-on-delivery refusals and returns counted in.

What you advertise
Online store

For the period the orders came in, for example the last 30 days.

The value of the orders from the ads over the same period, as the ad account reports it.

The number of orders over the same period.

How to count the goods

The share of the price you keep after the goods. Delivery and fees are counted separately.

What the goods in these orders cost you, in total.

Delivery, cash on delivery and returns · optional

Empty fields count as zero, and the result says which ones they were.

If the customer pays for delivery, leave it empty.

Card fees and the courier's cash-on-delivery commission.

The share of parcels customers did not collect.

The share of collected parcels sent back.

What it costs you to get one parcel back.

Enquiries

For the period the enquiries came in.

Calls, forms, messages: whatever you count.

What one client brings you

Out of every 100 enquiries, how many buy.

What you keep from a client's first order after goods and labour.

If clients come back: the average per client.

On average.

Compare channels

Spend and results for each channel over the same period. A result is whatever you count the same way everywhere: an order or an enquiry.

Google
Facebook and Instagram
TikTok
Another channel
Currency

This changes the sign beside the amounts only. Nothing is converted.

Your numbers stay in your browser. Without JavaScript they go to our server once to work out the result, and we do not keep them.

Result

What this means

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How we work it out

A ROAS of 4 can lose money at a 20% margin. That is why we work out break-even from your margin, not from a "good ROAS" for your industry. From the revenue we take off refused and returned parcels, then the goods and the fees. We subtract delivery on every parcel sent and return postage on every parcel that comes back. What is left pays for the ads: break-even is the ROAS at which it equals the ad spend.

The formulas

Revenue kept
revenue × (1 − refused) × (1 − returned)
Parcels that come back
orders × refused + orders × (1 − refused) × returned
Left before advertising
revenue kept × (margin − fees) − orders × delivery − parcels back × return cost
ROAS
revenue ÷ ad spend
Break-even ROAS
revenue ÷ left before advertising
Profit on ad spend (POAS)
left before advertising ÷ ad spend
Profit or loss per 100 of advertising
(left before advertising − spend) ÷ spend × 100
Most you can pay per order
left before advertising ÷ orders
Cash-on-delivery refusals
orders × refused × (delivery + return cost)
Cost per client (enquiries)
spend ÷ (enquiries × share that become clients)
Most you can pay per enquiry
profit from the first sale × share that become clients

The terms in our glossary: Return on ad spend (ROAS) · Cost per acquisition (CPA) · Customer acquisition cost (CAC) · Lifetime value (LTV)

QUESTIONS

What people ask

How is ROAS calculated?

ROAS is the revenue from the ads divided by what they cost. 4,000 of revenue from 1,000 of spend is a ROAS of 4. It tells you how much turnover the ads bring, not whether they make money: for that you need the margin, delivery and fees.

What is a good ROAS?

A good ROAS is one above your break-even. Break-even is the revenue divided by what is left of it after goods, delivery, fees and returns. At a 50% margin and no other costs it is 2; at a 20% margin it is 5. That is why a "good ROAS for your industry" says nothing about your store.

Google Ads

What is break-even ROAS?

It is the ROAS at which the advertising breaks even: everything left from the orders after goods, delivery, fees and returns goes on the ads. Above it the ads make money; below it they lose. The calculator works it out from your margin.

Why does cash on delivery change the numbers?

Because a refused parcel is paid for twice, once to the customer and once back, and brings no revenue. If 10% of parcels come back, every paid order also carries their delivery. The ad account counts the order, not the refusal, so the ROAS it shows looks better than it is.

What is the difference between ROAS and ROI?

ROAS compares revenue with ad spend. ROI compares profit with the whole investment. A ROAS of 3 can be a loss if the margin is thin; an ROI above zero is always a profit. That is why the calculator shows both sides: ROAS, and how much you make or lose on every 100 of advertising.

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