True ROAS Calculator
Reported ROAS overstates profitability by 30–60% for most ecommerce advertisers. This calculator uses your real cost structure (gross margin, return rate, payment processing, shipping) to compute contribution-margin ROAS.
Calculator
Free · no login · client-side onlyReported ROAS5.00x
True (margin-aware) ROAS1.04x
Break-even ROAS2.86x
True ROAS is 64% below break-even — scaling this account loses money.
The math
Net revenue = Revenue × (1 − Return rate)
Gross profit = Net revenue × Gross margin
Variable costs = Net revenue × (Payment processing + Shipping)
True ROAS = (Gross profit − Variable costs) ÷ Ad spend
Break-even ROAS = 1 ÷ (Gross margin − Processing − Shipping)
Gross profit = Net revenue × Gross margin
Variable costs = Net revenue × (Payment processing + Shipping)
True ROAS = (Gross profit − Variable costs) ÷ Ad spend
Break-even ROAS = 1 ÷ (Gross margin − Processing − Shipping)
Industry-typical reference values
Approximate medians from public DTC benchmark reports. Use as a sanity-check, not as your inputs — the calculator's value is in surfacing the gap for your actual numbers.
| Vertical | Gross margin | Return rate | Shipping % | Break-even ROAS |
|---|---|---|---|---|
| Apparel | 55% | 25% | 8% | 2.27x |
| Beauty | 65% | 5% | 6% | 1.79x |
| Beauty (premium) | 75% | 5% | 6% | 1.52x |
| Home goods | 45% | 8% | 12% | 3.33x |
| Furniture | 40% | 5% | 18% | 5.26x |
| Electronics | 25% | 3% | 5% | 5.88x |
| Supplements | 70% | 2% | 7% | 1.67x |
| Food & beverage | 45% | 1% | 15% | 3.70x |
| Luxury fashion | 70% | 18% | 10% | 1.75x |
| Pet supplies | 50% | 3% | 12% | 2.86x |
Sources: aggregated from Shopify state-of-commerce reports, McKinsey DTC benchmarks, public DTC brand financials, and the maintainer’s own client data across ~40 DTC accounts.
Open benchmark data
The full dataset is published under CC-BY 4.0. Cite or replicate.
Help
- What’s the difference between reported and true ROAS?
- Reported ROAS is revenue divided by ad spend — the number Google Ads shows. True ROAS subtracts the costs revenue doesn’t actually keep: returned product, payment processing fees, shipping/fulfillment, and the cost of goods. The gap is routinely 30–60% for ecom.
- What inputs do I need?
- Revenue and ad spend from your Google Ads / Shopify dashboards. Gross margin from your P&L (revenue minus COGS, divided by revenue). Return rate from your returns dashboard. Payment processing is usually 2.9–3.5% if you’re on Shopify Payments or Stripe. Shipping & fulfillment as a % of revenue varies by category — see the table above.
- Is it free?
- Yes. The calculator runs entirely in your browser; nothing is sent to a server. No login, no email gate.
- Can I embed this on my site?
- Embed support coming soon. In the meantime, link to roascalculatorapp.com directly.
Calculator maintained by Darshita Oza, performance marketer (LinkedIn). Methodology and source data: /methodology/. Questions or corrections: contact.