AD SPEND & ROAS

Target ROAS Calculator

Set a target profit per order or margin, then back into the allowable CPA, target ROAS, monthly ad budget and gap versus your current ROAS.

Currency: USD only. Target profit is before fixed costs, overhead and taxes; actual ROAS must use the same order economics.

Order economics and target

Average order valueRevenue per order, before tax.Product cost per orderCOGS for the average order.Fulfillment per orderShipping, pick-pack and packaging.Payment & platform fees (%)Share of AOV for gateway, Shopify and apps.Target modeSet a dollar profit or a margin target.Target profit per orderProfit before fixed costs and tax.Actual ROASCurrent attributed ROAS.Monthly ordersUsed to size the monthly ad budget.

Planning model. Target profit is before fixed costs, overhead and taxes. Returns, discounts, incrementality and currency conversion are excluded. Actual ROAS must use the same order economics.

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Target ROAS and budget

Target ROAS

3.30xActual 4.00x produces $15.20 profit vs a $12.00 target.

Allowable ad spend per order$18.20Contribution before ads minus target profit.

Contribution before ads$30.20AOV minus product, fulfillment and fees.

Actual profit per order$15.20Contribution minus actual ad spend per order.

Profit gap vs target+$3.20Actual profit minus target profit.

Monthly target ad budget$5,460.00Allowable CPA × monthly orders.

Target statusOn targetWhether actual ROAS hits the target.

Profit by ROAS

Profit per order at different ROAS levels, with the same order economics.

ROAS	Ad spend / order	Profit per order
2.00x	$30.00	+$0.20
3.00x	$20.00	+$10.20
4.00x	$15.00	+$15.20
5.00x	$12.00	+$18.20

How target ROAS is calculated

Contribution = AOV − product − fulfillment − fees. Allowable ad spend = contribution − target profit. Target ROAS = AOV ÷ allowable ad spend. Actual profit per order = contribution − AOV ÷ actual ROAS. Monthly budget = allowable ad spend × monthly orders.

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Target ROAS: start from the profit you want

Break-even ROAS tells you the floor. A target ROAS starts from the profit you want per order and works backward to the ad spend that still leaves it. This calculator also compares your actual ROAS with that target and sizes a monthly budget.

Target ROAS versus break-even ROAS

Break-even ROAS is the minimum needed to avoid losing money on the order. Target ROAS is higher: it reserves a profit per order before fixed costs. A store can be above break-even and still below its target.

The two numbers answer different questions. Break-even says “can I run this ad?” Target says “does this ad hit the profit I planned?”

The formula

Contribution before ads = AOV − product cost − fulfillment − fees. Allowable ad spend per order = contribution − target profit. Target ROAS = AOV ÷ allowable ad spend.

In margin mode, target profit = AOV × target margin. The rest of the calculation is the same. If allowable ad spend is zero or negative, the target cannot be met at any positive ROAS.

Worked example

AOV $60, product $21, fulfillment $7, fees 3% = $1.80. Contribution is $30.20. With a $12 profit target, allowable ad spend is $18.20 and target ROAS is 3.30x.

At an actual ROAS of 4.00x, ad spend per order is $15.00 and actual profit is $15.20, $3.20 above target. At 300 orders per month, the target budget is $5,460.

Profit mode and margin mode

Profit mode fixes a dollar amount per order. Margin mode fixes a percentage of AOV. A 20% margin on a $60 AOV is also $12, so the two modes produce the same target in this example.

Margin mode is easier to compare across products with different prices. Profit mode is easier to tie to a monthly profit plan.

Setting a realistic target

The target is only as good as the cost inputs. If fulfillment or payment fees are understated, the allowable ad spend is too high and the target ROAS too low. Use a fully loaded contribution, not a rough product margin.

Actual ROAS also needs the same attribution window and order economics. A platform-reported ROAS that includes returning customers or excludes returns can make the gap look better than it is.

Where the model stops

It excludes fixed costs, overhead, taxes, returns, discounts, currency conversion and incrementality. It also assumes every order has the same economics; a blended AOV can hide a product mix that loses money on some SKUs.

For the floor, use the break-even ROAS calculator. For profit at the current ROAS, use the ROAS to profit calculator. This tool is for setting the target and the budget behind it.

Target ROAS references checked October 2026: Google Ads target ROAS · Shopify analytics · Triple Whale

How is target ROAS calculated?+

Contribution before ads minus target profit gives allowable ad spend per order. Target ROAS is AOV divided by that allowable ad spend.

What is the difference between target ROAS and break-even ROAS?+

Break-even ROAS is the minimum to avoid a loss. Target ROAS includes a profit target per order, so it is higher than break-even whenever the target profit is positive.

What if allowable ad spend is zero or negative?+

The target profit is equal to or above contribution before ads, so no positive ad spend can hit it. The calculator shows target ROAS as a dash and status Target impossible.

Is target ROAS the same as the platform tROAS setting?+

No. Platform tROAS is a bidding target. This calculator derives the ROAS your unit economics require; the platform setting is a separate decision.

Does the monthly budget include fixed costs?+

No. It is allowable ad spend per order multiplied by monthly orders, before fixed costs, overhead and taxes.

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