ROAS Calculator

Are my ads covering their costs?

Your return on ad spend (ROAS) is the revenue your ads bring back for each dollar spent. Enter revenue and ad spend for the answer, then add your product costs to see the return you need to cover them.

Your numbers

$
Revenue from ads. The sales your ads brought in, as your ad platform or store reports them. Use the same period as your ad spend.
What’s this? Revenue from ads in the glossary
$
Monthly Ad Spend. Your total advertising budget across all paid channels — Facebook, Google, TikTok, etc. Good ROAS (4×+): 25% of revenue or less.
What’s this? Ad Spend in the glossary
%
Cost of Goods Sold (COGS). Percentage of revenue spent on product costs, packaging, fulfillment, and shipping. Typical range: 30-50%.
What’s this? Product costs (COGS), optional in the glossary
%
Target profit margin. The share of revenue you want to keep after product costs and ads. Leave it blank to skip the target ROAS.
What’s this? Target profit margin, optional in the glossary
How to use this calculator

Example numbers · Your ROAS

3.75×Clearing costs

Edit inputs
Example inputs · Revenue ÷ ad spend Edit inputs ↓

Your ROAS

3.75×

Verdict

Clearing costs

After product costs, each ad dollar returns $2.25 before paying for the ads. That leaves $6,250 after product costs and ads, before other expenses.

What your ROAS has to clear
Your ROAS3.75×
0×Line: break-even 1.67× · Gold mark: target 2.00×5.0×
Break-even ROAS
1.67×
1 ÷ your 60% gross margin
Target ROAS for a 10% margin
2.00×
1 ÷ (gross margin − target margin)
BENCHMARK

How you stack up

Directional D2C planning bands for Meta-attributed ROAS, a chosen anchor and not measured. The comparison point is where the Good band starts, and the scale below shows every band. Set your own target from your product margin: a high-margin brand can be profitable below it, and a thin-margin one may need more. Benchmarks are directional, not a guarantee; use them as a comparison point alongside your own historical data.

You vs. the planning band

Your ROAS

3.8×

Planning band

Where the Good band starts

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PoorAcceptableGoodExcellent

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More things we’d check

We’d compare 3.75× return with 1.67× product-cost break-even, then account for shipping and fees.

Check profit per order

We’d separate first orders from expected repeat purchases when deciding what the next customer can cost.

We’d review the product page alongside the ad.

Review your store

About ROAS

What is ROAS?

ROAS (return on ad spend) is the revenue your ads bring in for every dollar you spend on them. It is the number Meta, Google and Shopify all report, and usually the first one you check when you want to know if your ads are working.

Formula

ROAS = revenue from ads ÷ ad spend

Use the same period for both numbers: a month of revenue over a month of spend.

A worked example

  1. Your ads brought in $18,750 last month on $5,000 of spend.
  2. $18,750 ÷ $5,000 = 3.75× ROAS: every ad dollar brought back $3.75.
  3. Your product costs (COGS) are 40% of revenue, so you keep 60 cents of each sales dollar. Break-even ROAS is 1 ÷ 0.6 = 1.67×.
  4. At 3.75× these ads clear that line. The calculator above runs the same math on your numbers.

What’s a good ROAS?

It depends on your margin. A store that keeps most of each sale can live on a ROAS that would sink one with high product costs. So start with your own break-even ROAS, shown beside your result above, and make sure you are clearing it. Past that, this is the ladder our calculators grade against:

Under 2×
Poor. Below break-even for most brands once product costs and shipping are paid.
2–4×
Acceptable. The common planning baseline. Workable if your product margin is healthy.
4–6×
Good. Comfortable headroom — enough margin to absorb a soft month.
6×+
Excellent. Rare at scale. Usually a sign there is demand you are not yet spending into.

A ROAS in a good band can still lose money if your product costs are high. Break-even decides, not the band.

ROAS vs MER vs POAS

FAQ

Frequently asked questions

Common questions about ROAS calculations and advertising profitability

Start with the return needed to cover your costs. This calculator’s standard return on ad spend (ROAS) compares modeled revenue with ad spend; its product-cost-adjusted return removes product costs first. Neither includes shipping, payment fees, or overhead, so neither proves net profitability.

An industry average cannot set your break-even point. We’d use your product margin, acquisition costs, and other expenses to decide what return you need. Compare campaigns using the same revenue definition and reporting window.

Here, standard return is modeled revenue divided by ad spend. The product-cost-adjusted return subtracts product costs from that revenue before dividing by ad spend. Shipping, payment fees, and overhead are excluded. We’d check those separately before calling the ads profitable.

This calculator models revenue from the traffic, conversion rate, order value, and repeat-purchase multiplier you enter. Your ad platform uses its own sales attribution and reporting window. We’d align those assumptions before comparing the figures.

Our calculators use industry-standard formulas and are designed for directional accuracy. Results depend on the quality of your input data. For precise financial planning, we recommend validating results with your accountant or financial team.

Yes, completely free with no hidden costs. We offer these tools to help ecommerce brands succeed. We may occasionally share relevant insights via email if you opt in, but the tools remain free forever.

Your calculations run in your browser, and we don't store the numbers you type unless you choose to send them — by unlocking a benchmark, emailing yourself a report, or contributing an anonymous data point. We do record anonymous usage events, which tool was used rather than what you entered. The AI tools work differently: your store URL and the report or concepts we generate are saved so we can support you and so your share link keeps working. We never access your Shopify admin, your customer data, or any private account information.
GLOSSARY

Learn these key metrics

Return On Ad SpendROAS

The revenue generated for every dollar spent on advertising....

Customer Acquisition CostCAC

The total cost of acquiring a new paying customer, including all marketing and s...

Average Order ValueAOV

The average dollar amount customers spend per order/transaction....

Customer Lifetime ValueLTV

The total revenue a business expects to earn from a single customer over the ent...

Cost Per AcquisitionCPA

The cost of acquiring a specific action through a particular campaign or channel...

Marketing Efficiency RatioMER

Total revenue divided by total marketing spend, providing a holistic view of mar...

Browse all glossary terms

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4.1x return on ad spend in H1 2026, with monthly ad spend up 8x from May 2025 to Jun 2026 · Modified Tot · H1 2026 Read the Modified Tot case study