The calculator asks for my margin before ads: how do I work it out from price, product cost, shipping and fees?
Take the selling price and subtract everything you pay per order except advertising: product cost, shipping, packaging, platform and payment fees. Then divide what is left by the price. A product selling at 200 with 130 in costs has a 35% margin before ads, and that is the number you type into the optional field.
Why this one number deserves care
The margin field in the ROAS calculator is optional, but it is what turns the tool from a division into a verdict. From it alone come the break-even ROAS (1 ÷ margin), the estimated profit or loss after ads, and the line telling you whether the campaign is above or below break-even. Any error in the margin flows straight into that verdict, however accurate your revenue and spend are.
Step by step, with an example
Take a product you sell on Shopify or Salla at 200, with these costs per order:
- Product cost from your supplier: 90.
- Shipping you pay to get it to the customer: 25.
- Platform and payment gateway fees for the order combined: 15.
- Total cost before ads: 130. Profit before ads: 200 − 130 = 70.
- Margin before ads: 70 ÷ 200 = 35%. That is what goes in the margin field.
You can double-check in the Profit margin calculator by entering a cost of 130 and a price of 200: it shows a 35% margin. Note that it is the percentage of the price you want here, not the markup on cost.
What the calculator does with it
Say a campaign for this product brought in 10,000 in sales from 2,500 in spend. Enter both, then 35 in the margin field. ROAS is 4x, ads take 25% of revenue, break-even ROAS is 2.86x, so the verdict is above break-even with an estimated profit after ads of 1,000. That profit is 35% of 10,000, which is 3,500, minus the 2,500 spent.
Common mistakes when working out the margin
- Counting ad cost among the costs. The calculator subtracts spend itself, so putting it in the margin counts it twice. Add 20 of ads per order and the margin becomes 25%, and the tool would call this same campaign exactly break-even with zero profit, which is wrong.
- Forgetting free shipping. If you offer free delivery, you pay for it and it belongs in the sum.
- Using markup instead of margin. A 53.8% markup on a cost of 130 gives a price of 200, but the margin is only 35%.
- Ignoring tax. If the price includes VAT, take the tax out first and work out the margin on the price before it.
What if the campaign sells several products?
The calculator assumes one margin that holds across all attributed sales, and says so in its assumptions. If a campaign sells products with different margins, use an average weighted by what actually sold of each, not a simple average of the percentages. If the margins differ a lot, it is more accurate to run each product separately with its own revenue and its share of the spend.
Common questions
Do I enter the margin as a decimal like 0.35?
No, enter it as a percentage: 35. The field accepts 0 to 100.
Does the calculator remember my margin?
No. You type it each time, and the calculation runs in your browser.
What if my margin is zero?
The calculator tells you no ROAS breaks even, because every amount spent on ads is a loss.