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Dropshipping ROAS Calculator
Calculate ROAS (Return on Ad Spend) based on total ad revenue and total ad spend.
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What Is ROAS?
ROAS (Return on Ad Spend) is a key advertising performance metric that shows how much revenue you generate for every dollar spent on ads.
In simple terms, ROAS answers one question:
“For each $1 I spend on advertising, how much money do I get back?”
For dropshipping and ecommerce businesses, ROAS is one of the most important indicators of whether an ad campaign is scalable, sustainable, or losing money.
How This ROAS Calculator Works
This calculator uses the standard industry formula adopted by platforms like Meta Ads, Google Ads, and TikTok Ads:
You only need two inputs:
Total Revenue from Ads – the revenue attributed to your advertising campaigns
Total Ad Spend – the total amount spent on those ads
The result is displayed as a multiplier (e.g. 2.5x ROAS).
Why ROAS Matters in Dropshipping
In dropshipping, margins are often tight and ad costs fluctuate quickly. ROAS helps you:
Evaluate whether a campaign is profitable or just driving traffic
Compare performance across different products, creatives, or audiences
Decide when to scale, optimize, or stop an ad set
However, ROAS alone does not include product costs, shipping, or fees—so it should always be evaluated alongside your break-even ROAS.
FAQ
1. What is a “good” ROAS for dropshipping?
There is no universal benchmark, but as a general rule:
Below 1.0x – Losing money
1.5x – 2.5x – Break-even to low profit (depends on margins)
3.0x+ – Strong performance for most dropshipping stores
The “right” ROAS depends on your product cost structure and operating expenses.
2. Does ROAS equal profit?
No. ROAS only compares ad revenue vs ad spend.
It does not include:
Product cost
Shipping
Payment fees
Refunds or chargebacks
To determine profitability, you should compare your ROAS to your break-even ROAS.
3. Should I use gross revenue or net revenue?
Most ad platforms calculate ROAS using gross revenue attributed to ads.
For internal decision-making, advanced sellers may prefer net revenue (after refunds), but consistency is more important than the method itself.
4. Why is my ROAS high but I’m still not profitable?
This usually means your non-ad costs are too high.
Common causes include:
High product or shipping costs
Excessive transaction or platform fees
Refunds or failed deliveries
In this case, calculate your break-even ROAS to find your true profitability threshold.
5. How often should I check ROAS?
ROAS should be reviewed:
Daily during active testing
Weekly for stable campaigns
Before scaling any ad set
Short-term ROAS fluctuations are normal, so always analyze trends rather than single-day data.