Calculate the money available for advertising
Build the order without advertising first. The contribution left at that point is the maximum ad cost at break-even. This tool uses gross attributed product sales excluding buyer-paid shipping as the ROAS numerator; check that the campaign report you compare uses a compatible basis.
Keep creator commission in the pre-ad cost stack when the campaign order is also affiliate-attributed. Removing it because the sale came through an ad would overstate the advertising budget. Include full-refund expectations consistently in both the economic model and your interpretation of attributed sales.
Break-even ad cost per order = contribution before advertising; break-even ROAS = gross attributed product sales per order / break-even ad cost per orderIllustrative example: break-even is 4.11×, not a universal target
Assume a French €60 gross sale at 20% VAT, €5.40 platform commission, €6 creator commission, €18 product cost, €5 fulfilment and €1 packaging. There are no returns or other costs. Contribution before ads is €14.60, so break-even ROAS is €60 / €14.60 = 4.11×.
At €6 ad spend, ROAS is 10× and contribution is €8.60. A 4.11× campaign merely covers the entered order costs. It leaves no contribution for unallocated overhead, later adjustments or a profit target.
| Objective | Maximum ad cost | Required gross ROAS |
|---|---|---|
| Zero contribution | €14.60 | 4.11× |
| 10% contribution on gross sales | €8.60 | 6.98× |
| 15% contribution on gross sales | €5.60 | 10.72× |
How the target-margin ROAS is calculated
Use the target-margin control above to reserve contribution before setting the ad budget. Let P be gross product sales, S buyer-paid shipping, B contribution before ads and m the desired margin on gross customer payment. Reserve m × (P + S). In this example, a 10% target on €60 reserves €6 and leaves €8.60 for ads.
When the target uses the entire pre-ad contribution, no ad budget remains. When it exceeds that contribution, change price, costs or the target itself. The control distinguishes these cases and rounds a positive ROAS floor upward to protect the reserved contribution.
Target ad budget = B − m × (P + S); target product-sales ROAS = P / target ad budget, only when that budget is positiveCompare a campaign report on a compatible basis
Record the report's date range, attribution window, currency and treatment of refunds. A gross-sale ROAS from an immature cohort can look healthy before returns arrive. A store-wide blended ad ratio can also differ from a campaign ROAS because it includes organic orders and a different sales population.
Use order-level contribution to decide how much a sale can cost, then evaluate campaign results with the same cohort definition. ROAS alone cannot establish whether an additional sale was caused by advertising; that requires an incrementality test rather than an accounting formula.
- Keep the campaign's sales and spend in the same currency.
- Check whether reported sales include VAT, refunds and buyer shipping.
- Use the applicable post-promotion fee for the planned campaign dates.
- Retain affiliate commission on orders that also incur ad spend.
- Wait for the relevant return cohort to mature before treating early ROAS as final.
Use the target-margin control before setting an ad budget
The target control reserves a percentage of gross customer payment, including buyer-paid shipping. The ROAS numerator remains gross product price. The tool rounds the spend ceiling down and the ROAS floor up so display rounding does not authorize spending the reserved contribution.
The input advertising percentage still describes your current scenario; the target budget is calculated independently of that current spend. A zero available budget means the target permits no paid advertising. A negative available budget means it already fails before advertising.
When a higher ROAS target can reduce total contribution
A more restrictive target can improve contribution per order while reducing the number of orders available. The useful decision is whether the total contribution from the resulting sales justifies the spend and operating load. The calculator does not predict that demand response.
Compare actual cohorts at different spend levels without assuming a fixed conversion rate. If rising acquisition cost, a shift in product mix or increased returns erases contribution, the last successful average is not proof that the next budget increase will be profitable.