E-commerce & Marketing calculators

Which e-commerce calculator do you need?

Different business stages need different numbers. If you are launching a product, start with the E-commerce Profit Calculator to see whether your margins hold after fees, shipping, and advertising. If you are running paid ads, the ROAS Calculator and Break-Even ROAS Calculator tell you whether your campaigns are profitable and what return you need to cover costs.

For Amazon sellers, the Amazon FBA Profit Calculator accounts for referral fees, fulfilment fees, and storage by category. For subscription or repeat-purchase businesses, track Customer Lifetime Value (LTV) alongside Customer Acquisition Cost (CAC) — the LTV:CAC ratio is the single most important health metric for a scaling e-commerce brand.

The core e-commerce metrics explained

ROAS (Return on Ad Spend)

ROAS = Revenue from ads ÷ Ad spend. A ROAS of 4 means you earned $4 for every $1 spent on advertising. ROAS sounds good in isolation, but it is meaningless without knowing your margin. A store with 20% net margin needs at least 5× ROAS to break even on advertising; a store with 40% margin can survive on 2.5×.

Contribution margin

Contribution margin = Revenue − Variable costs. Variable costs include product cost, fulfilment, payment processing fees, and returns. Contribution margin is what remains to cover fixed costs (rent, salaries, software) and profit. A product with a 30% contribution margin means $0.30 of every sale goes toward fixed costs and profit.

LTV:CAC ratio

LTV:CAC = Customer lifetime value ÷ Customer acquisition cost. A ratio above 3:1 is the standard benchmark for a sustainable e-commerce business. Below 1:1, you are paying more to acquire customers than they will ever be worth. Most successful DTC brands target 3:1 to 5:1, with SaaS businesses aiming for 5:1 or higher.

Average Order Value (AOV)

AOV = Total revenue ÷ Number of orders. Increasing AOV — through bundles, upsells, free shipping thresholds — is one of the highest-leverage moves in e-commerce because it improves every other metric simultaneously: better ROAS, lower CAC as a % of order, higher LTV.

Common e-commerce pricing mistakes

• Pricing based on competitor prices without knowing your own costs. If a competitor can profitably sell at $25 and your cost structure requires $30, matching their price destroys your margins. Always price from cost up, then check competitive positioning.
• Forgetting variable costs in margin calculations. Payment processing (typically 2–3%), returns (average 20–30% for fashion), and marketplace fees (8–15% on Amazon) add up fast. Factor every variable cost before deciding a product is profitable.
• Using ROAS instead of MER (Marketing Efficiency Ratio). Platform-reported ROAS suffers from attribution windows and last-click bias. Blended MER — total revenue divided by total ad spend — gives a more accurate picture of advertising efficiency.
• Ignoring CAC payback period. Even a great LTV:CAC ratio is dangerous if payback takes 18 months and you are growing fast. You need cash today to fund next month's inventory and ads.

When to use a calculator vs. a BI tool

These calculators are designed for quick, decision-specific estimates — pricing a new product, evaluating an ad campaign, stress-testing a discount strategy. For ongoing business intelligence — trend analysis, cohort behaviour, multi-channel attribution — you will need a proper analytics stack (Google Analytics 4, Northbeam, Triple Whale, or similar).

Think of these tools as a fast sanity check: run the numbers here before building a spreadsheet or briefing your agency.

Frequently asked questions