Enter your product price and cost, what your ads cost and how many visitors buy. See your ROAS, the ROAS you need to make money, and the one number to fix first.
Every business starts somewhere
A low ROAS is a list of numbers to improve.
Most stores start below break-even. Small changes, one after another, multiply: each one raises ROAS on top of the last. Here is what they do to your numbers.
Step
ROAS
Cost per sale
Profit / month
What to do nextfrom your numbers
How ROAS really works
ROAS (return on ad spend) is sales from ads divided by ad spend. On its own it doesn't tell you what to fix. Built from its parts, it does:
The example the calculator opens with: a $120 product that costs you $48 with shipping, a $30 CPM, a 1.5% click rate and a 2% conversion rate.
Cost per click
$30 ÷ (1,000 × 1.5%)
$2.00
Cost per sale
$2.00 ÷ 2%
$100
ROAS
$120 ÷ $100
1.20
One sale leaves you
$120 − $48 − $3.60 fees
$68.40
Break-even ROAS
$120 ÷ $68.40
1.75
A ROAS of 1.2 sounds like the ads pay for themselves. They don't: each sale costs $100 in ads and leaves only $68.40. On $10,000 a month of ads, that's a $3,160 loss.
The ROAS you need
Break-even ROAS = price ÷ what one sale leaves you before ads
Below break-even, more ad spend means more loss. Aim higher: a ROAS that leaves about 20% of sales as profit is 2.70 in the example. Cheap products with a high product cost need a high ROAS. Expensive products with a good margin can live with a lower one.
Ads or website: where the ROAS is
Four numbers make your ROAS. 20% better on any of them gives 20% more ROAS. What differs is how far each one is from where it could be.
CPM (ads): audience, season, competition. $30–$40 is common on Meta. Hard to move much on your own.
Click rate (ads): creative, hook, offer in the ad. Test new creatives every week.
Conversion rate (website): product page, trust, offer, checkout. Often the biggest gap. 100 ways to raise it
Price / order value (website): price tests, bundles, add-ons, a free-shipping threshold. How to raise AOV
Many brands put all their effort into the ads, while the biggest gap is on the website. If 3 in 100 visitors bought instead of 2, the same ads would give 50% more ROAS.
ROAS (return on ad spend) = sales from ads ÷ ad spend. $12,000 in sales from $10,000 of ads is a ROAS of 1.2. Built from its parts: ROAS = product price × conversion rate ÷ cost per click. That shows which number is holding it back.
What is a good ROAS?
It depends on your product price and cost. Your break-even ROAS is the price divided by what one sale leaves you before ads: a $120 product that costs you $48 with shipping leaves about $68 after fees, so break-even is 1.75. Below that you lose money. Aim for a ROAS that leaves about 20% of sales as profit: 2.70 in this example.
Why do I lose money with a ROAS above 1?
Because ROAS counts sales, not profit. At a ROAS of 1.2, $1 of ads brings $1.20 in sales, but after the product, shipping and fees you may keep only 68¢ of it. You need a ROAS above your break-even, not above 1.
How do I improve ROAS?
ROAS has four parts: what 1,000 ad views cost (CPM), how many people click (click rate), how many visitors buy (conversion rate) and how much they pay (price or order value). 20% better on any of them gives 20% more ROAS. The calculator shows which one is furthest from a good level, so you know where effort pays most.
Is ROAS a website problem or an ad problem?
Both. CPM and click rate are ad numbers: audience and creative. Conversion rate and price are website numbers: product page, offer, checkout, bundles. Many brands only work on ads, while the biggest gap is often on the website.
What CPM and click rate are normal on Meta?
For e-commerce on Meta, a CPM of $30–$40 is common, and more around Black Friday. A link click rate of 1–1.5% is common and 2% or more is good. Below that, test new creatives and hooks first.
A planning tool, not financial or tax advice. Payment fees are counted at 3%. "Good levels" (CPM $25, click rate 2%, conversion rate 3%, price or order value +15%) are rules of thumb for e-commerce, not promises. Profit is before fixed costs and tax. Nothing you enter leaves your browser.