Target ROAS Calculator
Overheads subtracted before the target is set.
Target ROAS
5.26×
19% of revenue available for advertising
Target ROAS is one divided by what is left after profit and overheads. Setting a target without subtracting overheads is the common error — it produces a ROAS you can hit while the business still loses money.
How the Target ROAS Calculator works
A target ROAS built from contribution margin alone produces a number you can hit while the business still loses money. Fixed overheads have to come out first — the spend can only have what is left after profit and overheads are covered.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
How do I set a target ROAS?
Take contribution margin, subtract your net profit target and your overheads as a share of revenue, and divide one by what remains. That is the ROAS the advertising has to deliver.
Why subtract overheads?
Because rent, salaries and software do not pay themselves out of contribution margin. A target that ignores them is a break-even target dressed up as a profit target.
What if there is nothing left?
Then the business cannot afford paid acquisition at its current margin structure. Either the margin rises, the overheads fall, or growth has to come from channels that are not bought.
Should I use tROAS bidding?
Once you have enough conversion volume for the algorithm to learn — typically thirty or more a month per campaign. Below that it optimises on noise and performs worse than manual bidding.