Media Puppies
Contribution margin calculator
Revenue is not profit, and a 3x ROAS product can lose money once returns are counted. This works out what is genuinely left on an order, and the ceiling it puts on your acquisition cost.
Set from your location. The maths is the same in any currency — only the labels change.
What the product costs you, landed.
Your cost, not what you charge.
Share of orders returned or refused.
Reverse logistics plus anything unsellable.
Runs entirely in your browser. Nothing you type is sent to us or stored anywhere.
Why ROAS targets set without this are guesses
A brand told to hit 3x ROAS has no idea whether 3x is profitable. It depends entirely on what is left after cost of goods, shipping, fees and returns. Two brands at the same order value and the same ROAS can be in completely different positions.
Returns are where the money disappears
A returned order is not neutral. You lose the contribution you expected and you pay for the reverse journey, the inspection, and often the product itself if it cannot be resold. At a 12% return rate on a thin-margin product, returns can take a third of your contribution before a single ad has run.
Apparel brands routinely find that their best-performing product by ROAS is their worst by profit, because it is the one most often sent back.
Work at product level, not brand level
An average across the catalogue hides the products that are subsidising the rest. Run this for your top ten sellers individually. The usual finding is that two of them should be excluded from advertising entirely, and the budget they were absorbing is better spent elsewhere.
What to do with the number
- Set your target CAC below break-even, not at it. Break-even leaves you nothing for overheads.
- Use custom labels in your product feed to separate high-contribution items from low ones, so bidding can favour the profitable ones.
- Revisit after any price or freight change. A shipping rate rise quietly moves every one of these numbers.
For the whole-business version of this, use the blended ROAS and MER calculator. For repeat purchases, the LTV calculator shows how much more you can afford when customers come back.
Questions
Should I include my own salary or rent?+
No. Contribution margin is deliberately before fixed costs. It answers "does one more order make money", which is the acquisition question. Fixed costs are a separate conversation about volume.
What return rate should I use?+
Your real one, from your own data, over at least a quarter. Industry averages are useless here — the range between categories and even between sizes is enormous.
Does COD change this?+
Considerably, because refused deliveries behave like returns and the handling cost is often higher. Put your refusal rate into the return rate field and your actual RTO cost into the return cost field.
Why is break-even ROAS order value divided by contribution?+
Because at break-even you spend exactly the contribution to get the order. Order value divided by that spend is the ROAS figure the platform would report.
Embed this calculator
Free to use on your own site. Copy this into your page — the attribution line is the only condition.
The paragraph below the iframe is the part that matters: an iframe's contents are served from our domain, so a link inside it is not a link from your page. The paragraph is. The small script just resizes the frame to fit your column — drop it if you prefer, the fixed height still works.
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