Free Tool

Ecommerce Profitability Calculator

Find out if Google Ads will be profitable for your business before you spend a penny.

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Ready to find your true profit?

Most calculators ignore the hidden costs that kill profitability. Let's walk through your numbers step-by-step to see exactly what you can afford to spend on ads.

Product Economics

£
Average amount a customer spends per order.
Where to find this?

Shopify: Analytics > Dashboards > Average Order Value.
WooCommerce: Analytics > Orders > Average Order Value.

%
Percentage of revenue that goes to product costs.
Where to find this?

Check your supplier invoices.
Formula: (Product Cost / Selling Price) * 100.
Example: If you buy for £40 and sell for £100, your COGS is 40%.

£
Total amount a customer spends with you over their life.
Where to find this?

Shopify: Analytics > Reports > Customers over time.
If unknown, estimate: AOV * Average Purchases per Customer.

Operational Costs

£
Cost to ship one order to a customer.
Where to find this?

Calculate your total shipping bill for last month divided by total orders. Don't forget to include the cost of packaging materials (boxes, tape, inserts)!

%
Percentage of orders that are returned.
Where to find this?

Shopify: Analytics > Reports > Returns rate.
Benchmarks: Fashion (20-30%), Electronics (10%), General Ecommerce (5-10%).

%
Payment processor fee (e.g., Stripe/Shopify is ~2.9%).
Where to find this?

Check your payment gateway settings (Stripe, PayPal, Shopify Payments).
Standard rates are usually 1.4% + 20p (European cards) or 2.9% + 30p (International/Amex).

Marketing Budget

£
Your planned monthly budget for ads.
Where to find this?

Check your Google Ads or Meta Ads dashboard under "Cost" for the last 30 days, or enter your planned budget.

£
Management fees paid to an agency or freelancer.
Where to find this?

Enter 0 if you manage ads yourself. Otherwise, enter the monthly retainer you pay your agency or freelancer.

Why Calculate Break-Even ROAS?

Many ecommerce store owners focus purely on ROAS (Return on Ad Spend) without understanding their true profitability. A 4.0x ROAS might look great, but if your margins are slim, you could still be losing money on every sale.

This Ecommerce Profitability Calculator helps you find your "True North" metric: the exact ROAS you need to hit to cover Cost of Goods Sold (COGS), Shipping, Returns, Transaction Fees, and Agency Fees.

Frequently Asked Questions

How do I calculate Break-Even ROAS?

Break-Even ROAS is calculated by dividing your total revenue by your gross profit margin. For example, if your profit margin is 50%, your Break-Even ROAS is 2.0x (1 / 0.50).

What is a good ROAS for ecommerce?

A "good" ROAS depends on your profit margins. Generally, a ROAS of 4.0x (400%) is considered strong for most ecommerce businesses, but if you have high margins, you might be profitable at 2.0x.

Does this calculator account for agency fees?

Yes, this calculator allows you to input monthly agency or freelancer fees to see how they impact your overall profitability and break-even point.