Why does returns% matter so much?

Returns don’t just reduce revenue — they add reverse shipping, restocking labour, and often forfeit the ad cost that won the sale. A 5% return rate can eat 1-2 percentage points of margin.

Is break-even ROAS different from target ROAS?

Break-even is where profit = $0. Target ROAS is break-even plus your desired margin. Always advertise above break-even.

Business & E-commerce Popular

E-commerce True Profit & ROAS Tracker

See real per-order profit after COGS, shipping, ad spend, platform fees, returns and break-even ROAS. Free online E-commerce True Profit & ROAS Tracker. Calcula

ROAS = Revenue / Ad spend.

Selling price ($)

Units sold

COGS per unit ($)

Shipping per unit ($)

Platform fee (%)

Txn fee per order ($)

Total ad spend ($)

Returns rate (%)

Net Revenue

$7,599.05

True Profit

$3,007.16

Profit Margin

39.6%

ROAS

9.50×

ACoS

10.5%

CPA

$8.00

Break-even ROAS

2.00×

Total Costs

$4,591.89

Cost breakdown

COGS · $2,200.00
Shipping · $650.00
Platform/merchant fees · $911.89
Transaction fees · $30.00
Advertising · $800.00

Derivation

├── 01Givenprice = $79.99, units = 100, ad spend = $800, returns % = 5%
├── 02Gross revenue$79.99 × 100 = $7,999.00
├── 03Returns5% × $7,999.00 = $399.95
├── 04Net revenue$7,999.00 − $399.95 = $7,599.05
├── 05COGS total$22 × 100 = $2,200.00
├── 06Shipping total$6.50 × 100 = $650.00
├── 07Platform fees12% × $7,599.05 = $911.89
├── 08Txn fees$0.30 × 100 = $30.00
├── 09Total costsCOGS + Ship + Platform + Txn + Ads = $4,591.89
├── 10True profit$7,599.05 − $4,591.89 = $3,007.16
├── 11FormulaROAS = Net revenue / Ad spend
├── 12ROAS$7,599.05 / $800.00 = 9.50×
└── 13Break-even ROAS2.00×

Did you know?

ROAS (Revenue / Ad Spend) was popularised by Google AdWords’ reporting in 2004 — before that, advertisers mostly tracked CPM and CTR.

§01What is

Understanding the E-commerce True Profit & ROAS Tracker

A true-profit calculator for e-commerce sellers that accounts for COGS, shipping, platform/merchant fees, transaction fees, returns and ad spend — so you see real margin and Return on Ad Spend (ROAS), not just gross revenue.

Every decision in a business eventually reduces to a number — margin, ROAS, payback period, break-even. Getting those numbers fast and accurate is how operators avoid leaving money on the table. The E-commerce True Profit & ROAS Tracker sits in that toolkit — it see real per-order profit after COGS, shipping, ad spend, platform fees, returns and break-even ROAS. Enter your numbers above and the result updates instantly; every step of the math is shown in the Derivation panel so you can see exactly how the answer was reached.

§02The Formula

How it’s calculated

True Profit = Revenue × (1 − returns%) − COGS − Shipping − Platform% − Txn − Ads

Where

Revenue: Price × units sold
returns%: Share of sales refunded
COGS: Cost of goods sold (per unit × units)
Platform%: Marketplace / merchant fees on net revenue
ROAS: Net Revenue ÷ Ad Spend
Break-even ROAS: Revenue / (Revenue − variable costs)

§03Practical Example

Step-by-step walkthrough

Scenario

Sell 100 units at $79.99, COGS $22, shipping $6.50, 12% platform fee, $0.30 txn fee, $800 ad spend, 5% returns.

01Revenue = 100 × $79.99 = $7,999
02After returns: $7,999 × 0.95 = $7,599
03Variable costs: $2,200 + $650 + $912 + $30 = $3,792
04Profit before ads: $7,599 − $3,792 = $3,807
05True profit after $800 ads = $3,007
06ROAS = $7,599 / $800 = 9.5×

§04FAQ

Frequently asked questions

Depends entirely on your margins. A high-margin info product can thrive at 1.5× ROAS; a 10%-margin commodity needs 10× or better.

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