Ecommerce ROAS check
A store spends $3,000 on ads, attributes $12,000 in revenue and has 65% gross margin.
- Ad spend: $3,000
- Attributed revenue: $12,000
- Gross margin: 65%
Paid acquisition
ROAS Calculator
Calculate return on ad spend and contribution after gross margin.
Paid acquisition
ROAS Calculator
Use this to decide whether attributed revenue from ads is enough to cover media spend after product or delivery costs.
How to use this calculator
Start with conservative inputs, copy the result, then test a best-case and worst-case version. For production decisions, compare the estimate against actual accounting, analytics and payment data.
Best used for
Use this to check whether ad-attributed revenue is high enough to cover media spend after gross margin.
Formula
ROAS shows revenue returned for each dollar of ad spend. Contribution after margin shows whether that revenue can actually cover the media cost.
Formula
ROAS = attributed revenue / ad spend. Contribution = attributed revenue * gross margin - ad spend.
Example
How to read the result
- Break-even ROAS is roughly one divided by gross margin before overhead.
- Contribution after ad spend is usually more useful than revenue-only ROAS.
- A high ROAS can still be weak if order volume is too small or margin is low.
Common mistakes
- Trusting platform attribution without comparing payment and analytics data.
- Ignoring refunds, discounts and product cost.
- Scaling campaigns that have ROAS but negative contribution profit.
FAQ
Is high ROAS always profitable?
No. A high ROAS can still lose money if gross margin is low, refunds are high or fixed costs are ignored.
What is break-even ROAS?
Break-even ROAS is roughly 1 divided by gross margin. At 50% gross margin, break-even ROAS is about 2.0x before overhead.
Should I use platform-reported revenue?
Use platform data as a starting point, then compare it with analytics and payment data because attribution can be inflated or incomplete.
Important limits
- ROAS depends heavily on attribution settings and reporting windows.
- Contribution after margin is usually more useful than revenue-only ROAS.