ROAS Calculator - Return on Ad Spend
Calculate ROAS (Return on Ad Spend), determine if your Shopify ads are profitable, and see how much revenue each dollar generates. Essential tool for managing Facebook Ads, Google Ads, and TikTok Ads.
Calculate Your ROAS
How much you spent on advertising
Total sales generated from ads
Advanced Settings (Optional)
Your average profit margin on products
Total orders from ads
Total ad clicks
Campaign Metrics
Great performance! Strong returns that allow for healthy profit margins. Continue optimizing and scaling.
Minimum ROAS needed to break even with 35% margin
How to Use the ROAS Calculator
ROAS (Return on Ad Spend) measures how much revenue you generate for every dollar spent on advertising. Enter your ad spend and revenue to instantly calculate ROAS, profitability, and key advertising metrics.
What is ROAS?
ROAS = Revenue ÷ Ad Spend
If you spend $100 on ads and generate $400 in revenue, your ROAS is 4x (or 400%). This means every $1 spent returns $4 in revenue. ROAS is the most important metric for measuring advertising effectiveness.
ROAS vs ROI: What's the Difference?
ROAS measures revenue, not profit. A 3x ROAS means $3 revenue per $1 spent, but doesn't account for product costs.
ROI measures actual profit. ROI = (Revenue - Ad Spend - Product Costs) ÷ Total Investment × 100. ROI tells you if you're actually making money after all costs.
Example: $100 ad spend generates $300 revenue (3x ROAS). If products cost $150 to fulfill, your profit is $50, making ROI 50%. You can have great ROAS but negative ROI if margins are too low.
What's a Good ROAS for Shopify Stores?
- Excellent (5x+): Outstanding performance. Scale aggressively.
- Great (4-5x): Strong returns. Comfortable margin for most businesses.
- Good (3-4x): Solid performance. Profitable for businesses with 25%+ margins.
- Acceptable (2-3x): Marginal profitability. Works if margins are high (40%+).
- Concerning (1.5-2x): Likely unprofitable after product costs.
- Unprofitable (<1.5x): Losing money. Stop campaigns and optimize.
How to Calculate Break-Even ROAS
Break-Even ROAS = 1 ÷ Profit Margin
If your profit margin is 40% (0.40), your break-even ROAS is 1 ÷ 0.40 = 2.5x. You need minimum 2.5x ROAS to not lose money. Target 3-4x to be comfortably profitable.
ROAS Benchmarks by Platform (2025)
Facebook/Instagram Ads: 2.5-4x average, 5x+ excellent
Google Shopping: 4-6x average, 8x+ excellent
Google Search: 3-5x average, 7x+ excellent
TikTok Ads: 3-5x average, 6x+ excellent
Pinterest Ads: 2-4x average, 5x+ excellent
How to Improve ROAS
- Better targeting: Reach people more likely to buy with lookalike audiences and interest targeting
- Improve ad creative: Test 5+ ad variations weekly. Better creative = higher CTR and conversion rates
- Optimize landing pages: Fast load times, clear CTAs, trust signals increase conversion rates
- Increase average order value: Bundles, upsells, and cross-sells boost revenue per customer
- Retarget website visitors: Retargeting campaigns often achieve 5-10x ROAS
- Exclude poor performers: Use negative keywords and audience exclusions to stop wasting budget
- Test different ad platforms: Some products perform better on Google vs Facebook vs TikTok
- Seasonal timing: Advertise during peak buying periods when conversion rates are higher
Common ROAS Mistakes
❌ Ignoring profit margins: High ROAS doesn't mean profit if margins are too low. Always calculate ROI.
❌ Inconsistent attribution windows: Comparing 1-day attribution vs 7-day attribution creates false data. Use consistent windows.
❌ Not accounting for returns/refunds: Return rate reduces actual revenue. Factor this into ROAS calculations.
❌ Judging ROAS too quickly: New campaigns need 7-14 days to optimize. Don't kill campaigns after 2 days.
❌ Expecting same ROAS across all products: High-ticket items often have lower ROAS but higher profit per sale. Budget items need higher ROAS for profitability.
Important Note
Platform-reported ROAS (from Facebook Ads Manager, Google Ads, etc.) often differs from actual ROAS in Shopify Analytics due to attribution differences. Cross-reference both to understand true performance. Trust Shopify's numbers for actual revenue.