Ecommerce ROI & ROAS Calculator
Determine the profitability of your digital advertising campaigns instantly.
Total Traffic
0
Total Orders
0
Total Revenue
$0.00
Total Ad Spend
$0.00
Product Costs (COGS)
$0.00
Net Profit
$0.00
ROAS (Return on Ad Spend)
0.0x
ROI (Return on Investment)
0%
How to Calculate ROAS and ROI for Ecommerce
Understanding the difference between ROAS (Return on Ad Spend) and ROI (Return on Investment) is critical for any digital marketer or business owner. While these metrics are related, they tell different stories about your campaign's health.
What is ROAS?
ROAS measures the gross revenue generated for every dollar spent on advertising. It focuses strictly on the efficiency of your ad budget.
Formula: Revenue / Ad Spend
For example, if you spend $1,000 on ads and generate $5,000 in revenue, your ROAS is 5x (or 500%). This means for every $1 you put into ads, you get $5 back in revenue.
What is ROI?
ROI is the ultimate measure of profitability. Unlike ROAS, ROI accounts for the cost of goods sold (COGS) and other expenses, giving you the true picture of your net profit.
Formula: ((Revenue – Total Expenses) / Total Expenses) * 100
If your ROAS is high but your profit margins are low (due to high product costs), your ROI could still be negative. This calculator helps you balance ad efficiency with actual business profitability.
Key Metrics Explained
- CPC (Cost Per Click): The average amount you pay each time a user clicks your ad. Lower CPCs usually lead to higher ROI, provided the traffic quality remains high.
- Conversion Rate: The percentage of visitors who complete a purchase. Improving your website's user experience (UX) is the most effective way to boost this number without increasing ad spend.
- AOV (Average Order Value): The average amount a customer spends per transaction. Bundling products or offering upsells can increase AOV, directly impacting your ROAS.
What is a "Good" ROAS?
A "good" ROAS depends heavily on your profit margins. If you have high margins (e.g., digital products), a ROAS of 2.0x might be profitable. If you have low margins (e.g., dropshipping or electronics), you might need a ROAS of 4.0x or higher just to break even. Use the "Net Profit" field in the calculator above to determine your specific break-even point.