Free calculator
Put in last month's revenue, spend and costs. See the ROAS you need to break even, the MER you need to hit your margin, and what you keep on each order.
What is left of revenue after product cost, shipping, fees and returns, before any marketing.
The return on ad spend at which a campaign adds nothing and loses nothing.
The blended ratio that leaves your target net margin after marketing is paid.
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MER is marketing efficiency ratio: total revenue divided by total marketing spend for the same period. It is sometimes called blended ROAS. It does not depend on any ad platform attributing a sale, so it cannot be inflated by two platforms claiming the same order.
Break-even ROAS is 1 divided by your contribution margin before marketing. If you keep 50 cents of every dollar after product cost, shipping, fees and returns, you need 2 dollars of revenue per dollar of ads just to get back to zero. Anything below that loses money on every order.
Platform ROAS counts only the revenue that platform says it caused, and each platform uses its own attribution window. MER uses the revenue in your bank account. Use platform ROAS to compare campaigns with each other and MER to decide whether the business is making money.
Everything you pay to get orders: ad spend on every channel, agency and freelancer fees, creative production, influencer and affiliate payouts, and the tools you only pay for because of marketing. Leaving out fees makes MER look better than it is.
To show a rough cost per new customer. If all of your spend went to winning first orders, CAC would be spend divided by new customer orders. Comparing that to what you keep on a first order tells you whether you depend on repeat purchases to make money.
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