ROAS, Break-Even ROAS and MER Calculator
Find out if your ads actually make money — after returns, product cost, shipping and payment fees. Built for fashion brands, works for any store.
Last updated
- Net ROAS after returns
- 2.56
- Break-even ROAS
- 2.66
- Break-even net ROAS
- 2.13
- Max cost per purchase
- $35.75
- Profit after ad spend
- $2,040
At a ROAS of 3.20, these ads are profitable on the first order: you need 2.66 to break even once returns, product cost, shipping and fees are paid.
Example numbers for an illustrative fashion brand — enter your own. Assumes returned items go back into stock; shipping and payment fees are paid on every order.
The formulas
How To Calculate ROAS, Break-Even ROAS And MER
ROAS (return on ad spend) is revenue from ads divided by ad spend. A ROAS of 3 means every $1 of ads brought back $3 in sales. Break-even ROAS is the ROAS at which ads stop losing money: your average order value divided by the profit each order makes before ads. MER (marketing efficiency ratio) is total store revenue divided by total ad spend.
| ROAS | Revenue from ads ÷ ad spend |
|---|---|
| Net ROAS | ROAS × (1 − return rate) |
| Profit per order before ads | AOV × (1 − return rate) × (1 − product cost %) − shipping − (return rate × cost per return) − payment fees |
| Break-even ROAS | AOV ÷ profit per order before ads |
| Break-even net ROAS | AOV × (1 − return rate) ÷ profit per order before ads |
| MER | Total store revenue ÷ total ad spend (all channels) |
A Worked Example
An illustrative fashion brand sells dresses at a $95 average order. Product cost is 35% of the price, shipping and fulfillment cost $9 an order, payments cost 2.9% + $0.30, and 20% of sales come back as returns that cost $8 each to process.
- Profit per order before ads: $95 × 0.8 × 0.65 − $9 − (0.2 × $8) − $3.06 = $35.75.
- Break-even ROAS: $95 ÷ $35.75 = 2.66. Ads that report less than 2.66 lose money on the first order.
- Last month the brand spent $10,000 on Meta and Meta reported $32,000 in sales: a ROAS of 3.20 — above break-even.
- After returns, that’s a net ROAS of 2.56, and about $2,040 of profit on those first orders after paying for the ads.
- Across the whole store the brand made $60,000 on $15,000 of total ad spend: an MER of 4.00.
Why returns matter
Returns Move Your Break-Even ROAS More Than Anything Else
Platform ROAS is built on sales, not on what customers keep: Meta defines purchase ROAS as “purchase conversion value divided by amount spent”, and Shopify’s own ROAS uses gross sales. Fashion gets a lot sent back — here’s the same example brand at different return rates, with nothing else changed.
For scale: the NRF and Happy Returns estimate that 19.3% of US online sales were returned in 2025, and Coresight Research puts the average return rate of US online apparel orders at 24.4% (2023 survey of 100 apparel brands and retailers).
| Return rate | Profit per order before ads | Break-even ROAS |
|---|---|---|
| 0% | $49.70 | 1.91 |
| 10% | $42.72 | 2.22 |
| 20% | $35.75 | 2.66 |
| 30% | $28.77 | 3.30 |
| 40% | $21.80 | 4.36 |
Same brand as the worked example: $95 AOV, 35% product cost, $9 shipping, 2.9% + $0.30 payment fees, $8 per return.
What’s a good ROAS?
What’s A Good ROAS For Fashion Brands?
A good ROAS for a fashion brand is any ROAS above its own break-even ROAS, measured after returns. There is no universal number: a brand that keeps 70% of each sale before ads is profitable at a ROAS of 1.5, while a brand that keeps 30% after product cost, shipping, fees and returns loses money at 3. Start from your margin, not from someone else’s benchmark.
What ROAS do other fashion brands report?
The largest published numbers come from Triple Whale, an analytics tool, as medians across the apparel and accessories brands that use it (August 2025 – July 2026, platform-reported ROAS).
| Platform | Median ROAS | Brands in sample |
|---|---|---|
| Meta (Facebook & Instagram) | 2.24 | 40,000+ (all industries) |
| Google Ads | 3.99 | 21,000+ (all industries) |
| TikTok | 2.70 | 5,900+ (all industries) |
Medians among Triple Whale customer brands in “Apparel & Accessories”, not an industry average; the attribution window isn’t published. Notice that the Meta median, 2.24, is below the 2.66 our example brand needs to break even — a typical ROAS can still be a losing one.
Two more things decide whether a ROAS is good enough. New vs. returning customers: a first order that only breaks even can still be a great deal if customers come back — that’s lifetime value. Attribution: the platform’s ROAS is its own estimate; MER checks it against what actually landed in your store.
| Profit before ads, % of price | Break-even ROAS |
|---|---|
| 70% | 1.43 |
| 60% | 1.67 |
| 50% | 2.00 |
| 40% | 2.50 |
| 30% | 3.33 |
| 20% | 5.00 |
ROAS vs. MER: Which Should You Use?
Use ROAS to compare campaigns, ads and platforms with each other, and MER to check whether all your advertising together is paying off. ROAS comes from each platform’s own attribution; MER comes from your store’s real revenue, so it can’t be inflated by two platforms claiming the same sale.
| ROAS | MER | |
|---|---|---|
| Measures | Revenue the platform attributes to its ads ÷ spend on that platform | All store revenue ÷ all ad spend |
| Data source | Meta, Google, TikTok… each counts its own way | Your store (e.g. Shopify) and your ad bills |
| Best for | Choosing between campaigns, ads and concepts | Judging total ad spend and growth |
| Blind spot | Platforms can double-count; returns ignored | Can’t tell you which ad did the work |
Heads-up when comparing reports: some tools, including Triple Whale, calculate MER the other way round — ad spend ÷ revenue, shown as a percentage. An MER of 25% in that format is 4.0 here.
How to use your result
What To Do With Your Number
Below break-even?
Don’t only cut budget. Check the inputs first: a price change, a cheaper shipping rate or fewer returns can lower your break-even more than any optimization. Then test new concepts — often the ad, not the audience, is what’s missing.
Comfortably above?
That’s room to scale. Raise budgets in steps and watch whether ROAS holds; if it drops toward break-even, you’re reaching colder buyers and need new concepts to reach them.
All over the place by ad?
If ROAS varies widely by ad, read it by persona and angle, not by ad. Tag every ad with the persona and the angle it targets, and the pattern behind your winners becomes visible — that’s the core of our persona × angle method.
ROAS fine, MER falling?
Platforms may be claiming the same sales, or ads may be taking credit for customers who would have bought anyway. Trust the store numbers and test spend changes before scaling further.
Keep going
- The persona × angle method
- Black Friday ads for fashion brands (with a discount break-even calculator)
- All free tools
Want Us To Check Your Numbers?
Bring your ROAS, MER and margins to a 45-minute strategy session with Hugo. We’ll tell you what we’d test first.
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Cite this page
MoonDesk Media. “ROAS, Break-Even ROAS and MER Calculator.” moondeskmedia.com/tools/roas-calculator. Updated October 2026.Add this calculator to your site
<iframe src="https://moondeskmedia.com/tools/roas-calculator/embed" title="ROAS calculator by MoonDesk Media" width="100%" height="760" style="border:0;border-radius:24px;max-width:960px" loading="lazy"></iframe>What is a good ROAS for a clothing brand?
A good ROAS for a clothing brand is one above its break-even ROAS after returns. Break-even ROAS is 1 divided by the profit each order makes before ads, as a share of the price — so a brand that keeps 40% of each sale before ads breaks even at a ROAS of 2.5, and one that keeps 50% breaks even at 2.
How do you calculate break-even ROAS?
Divide your average order value by the profit each order makes before advertising. Take the price, subtract product cost, shipping, payment fees and the cost of returns, then divide the price by what’s left. If an order makes $35 before ads on a $95 sale, break-even ROAS is 95 ÷ 35 = 2.71.
What is the difference between ROAS and MER?
ROAS is the revenue an ad platform attributes to its own ads divided by what you spent there. MER (marketing efficiency ratio) is your total store revenue divided by your total ad spend across every channel. ROAS compares campaigns; MER shows whether all your advertising together pays off.
Should ROAS include returns?
Your decisions should. Platform ROAS is purchase value divided by spend — Meta’s definition doesn’t subtract refunds — so a brand with a 20% return rate is really getting about 80% of the reported revenue. Compare net ROAS with your break-even net ROAS, or compare platform ROAS with a break-even ROAS that already accounts for returns — which is what this calculator does.
Is a ROAS of 2 good?
It depends on your margin. A ROAS of 2 is profitable if each order keeps more than half its price after product cost, shipping, fees and returns, and loses money if it keeps less. For many fashion brands with returns, 2 is close to break-even — enter your own numbers above to see.
What is the difference between ROAS and ROI?
ROAS measures revenue per dollar of ad spend; ROI measures profit per dollar invested. A ROAS of 3 can still be a negative ROI if product cost, shipping, fees and returns eat more than two-thirds of each sale. Break-even ROAS is the bridge between the two: above it, ad ROI is positive.
What is a good MER for an ecommerce brand?
A good MER is one above the break-even ROAS of your average order — the same margin math, applied to the whole store. If each order keeps 40% of its price before ads, total revenue has to be at least 2.5 times total ad spend before advertising pays for itself on first orders.
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