Enter basket value, costs and ad budget. You see your break-even ROAS, your maximum CPA and the profit after ads. No sign-up, nothing is saved.
In short: Break-even ROAS = basket value divided by contribution margin per order. If your ROAS is above it, your ads make money, if it is below, you lose money. Example: basket €60, contribution margin €20 gives a break-even ROAS of 3.
Purchase price of all products in the basket.
Return shipping and handling.
ROAS = revenue from ads divided by ad spend. 3 means: €1 of ads brings €3 of revenue.
Your ROAS is above break-even: 51% headroom before you lose money.
All figures net. Nothing is saved or sent.
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ROAS (Return on Ad Spend) is the most important metric for paid advertising. But it says nothing about your profit as long as you do not know your margin. That is why every ROAS needs a break-even ROAS: the value from which advertising stops losing money.
Basket €60, cost of goods €18, shipping and fees €7, return rate 10% at €6 per return. The contribution margin is about €30, the break-even ROAS about 2. Running at ROAS 3 leaves a buffer. Running at ROAS 1.5 loses money, even if the campaign “brings revenue”.
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ROAS stands for Return on Ad Spend. It shows how much revenue you earn per euro of advertising. Formula: ROAS = revenue from ads divided by ad spend. A ROAS of 4 means: €1 of ads brings €4 of revenue.
Break-even ROAS = basket value divided by contribution margin per order. The contribution margin is what is left after cost of goods, shipping, payment fees and returns. Example: basket €60, contribution margin €20 gives a break-even ROAS of 3.
There is no universal good ROAS. It depends on your margin. A good ROAS is clearly above your break-even ROAS. With a 33% margin the break-even is 3, with a 50% margin it is 2.
ROAS measures revenue per ad euro, ROI measures profit relative to the investment. A high ROAS can still mean a loss if the margin is small. That is why this calculator works with the contribution margin.
CPA stands for Cost per Acquisition: the ad cost per order. The break-even CPA is the highest CPA at which you still do not lose money. It equals the contribution margin per order.
Yes. You enter the return rate and the cost per return. Returned goods count as resellable, the return shipping costs money.