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Help & formulas

Help & formulas

AdMargins only uses standard, well-known formulas. Nothing is estimated or guessed. If a number can’t be calculated from what you entered, you’ll see “—” and the reason.

Brand profit (imported ad data)

Ad spend
From the ad platform: amount spent / cost

What was spent on ads in this period.

Revenue
From the ad platform: purchase / conversion value

Revenue the ad platform attributes to these ads, before refunds.

Purchases
From the ad platform: purchases / conversions

Orders the ad platform attributes to these ads.

ROAS
Revenue ÷ Ad spend

Revenue for every 1 spent on ads. It ignores costs, so compare it with break-even ROAS.

Break-even ROAS
1 ÷ Contribution margin

The ROAS where profit is exactly zero after product costs, fees, refunds and fulfilment.

Target ROAS
1 ÷ (Contribution margin − Target margin × (1 − Refund rate))

The ROAS needed to keep the brand’s target profit margin.

POAS
Contribution ÷ Ad spend

Gross profit generated for every 1 spent on ads. Above 1× the ads make money; below 1× they lose money.

Refunds & returns
Revenue × Refund rate

Revenue expected to be refunded.

Net revenue
Revenue − Refunds

Revenue actually kept after refunds.

Product costs
Net revenue × Product cost %

What the products sold cost. Returned items are assumed to go back into stock.

Payment fees
Revenue × Payment fee %

Processor fees on all orders. Most processors keep them when an order is refunded.

Fulfilment
Purchases × Fulfilment per order

Shipping, packing and handling for every order.

Gross profit
Net revenue − Product costs − Payment fees − Fulfilment

What the sales leave to pay for ads and profit (contribution).

Profit
Gross profit − Ad spend

What these ads actually earned after every variable cost.

Profit margin
Profit ÷ Net revenue

How much of every sale is kept as profit.

Contribution margin
Gross profit ÷ Revenue

Share of each unit of revenue left to pay for ads and profit.

AOV
Revenue ÷ Purchases

Average value of one order.

CPA
Ad spend ÷ Purchases

What the ads cost, on average, to get one order.

Max CPA
Gross profit ÷ Purchases

The most the ads can cost per order before orders lose money.

CPM
Ad spend ÷ Impressions × 1,000

What 1,000 ad views cost.

CPC
Ad spend ÷ Clicks

What one click to the site cost.

CTR
Clicks ÷ Impressions

Share of people who saw the ad and clicked.

Conversion rate
Purchases ÷ Clicks

Share of clicks that became orders.

True profit check

Store revenue
From your store: all orders in the period, before refunds, without tax

Every sale in the period, including sales that didn’t come from ads.

Revenue claimed by platforms
Σ Purchase value reported by each ad platform

What the ad platforms say their ads brought in. The same order can be claimed by more than one platform.

Claimed by platforms
Revenue claimed by platforms ÷ Store revenue

Above 100%, the platforms claim more sales than your store made, so their ROAS and profit are overstated.

MER
Store revenue ÷ Total ad spend

What your store sold for every 1 spent on all ads. Also called blended ROAS. Platform attribution can’t inflate it.

Break-even MER
1 ÷ (Store gross profit ÷ Store revenue)

The MER at which the whole store’s profit after ads is exactly zero.

Store profit
Store gross profit − Total ad spend − Other costs

Profit on everything the store sold, after product costs, fees, shipping, refunds, all ad spend and other costs. Uses the same costs as the rest of the dashboard.

Profit by platform numbers
Gross profit of claimed revenue − Ad spend − Other costs

The profit shown in the rest of the dashboard, which trusts what the ad platforms report.

Difference
Store profit − Profit by platform numbers

Negative means the platforms make the ads look more profitable than they really are.

Calculator: ad performance

CPM
Ad spend ÷ Impressions × 1,000

What you pay for your ad to be shown 1,000 times.

CPC
Ad spend ÷ Link clicks

What you pay, on average, for one person to click your ad.

CTR
Link clicks ÷ Impressions × 100%

Out of everyone who saw your ad, the share who clicked.

Conversion rate
Sales ÷ Link clicks × 100%

Out of everyone who clicked, the share who bought.

CPA
Ad spend ÷ Sales

What you paid in ads, on average, to get one sale.

CPL
Ad spend ÷ Leads

What you paid in ads, on average, to get one lead.

Lead rate
Leads ÷ Link clicks × 100%

Out of everyone who clicked, the share who became a lead. Leads from instant forms don’t need a link click, so this can exceed 100% for those campaigns.

Lead-to-sale rate
Sales ÷ Leads × 100%

Out of all your leads, the share who bought.

Calculator: revenue & profit

Revenue
Sales × Average order value (or as entered)

Total money customers paid you from these ad sales, before refunds.

ROAS
Revenue ÷ Ad spend

Revenue for every 1 spent on ads. 3× means 3 back for every 1 spent. This is revenue, not profit.

Refunds
Revenue × Refund rate

Revenue you expect to refund. Refunded products are assumed to go back into stock; payment fees and shipping are not recovered.

Cost of sales
Sales × Cost per sale

What all the sales cost you: product (refunded items go back to stock), shipping, other per-sale costs and payment fees.

Gross profit
Revenue − Refunds − Cost of sales

What is left from sales after refunds, product, shipping and payment fees, before ad spend.

Profit
Gross profit − Ad spend − Other fixed costs

Your real profit after product costs, ad spend and other fixed costs.

Profit margin
Profit ÷ (Revenue − Refunds) × 100%

How much of the revenue you keep, after refunds, is profit.

ROI
Profit ÷ (Ad spend + Other fixed costs) × 100%

Profit for every 1 put into marketing. 50% means 0.50 profit for every 1 invested. Negative means a loss.

Calculator: break-even

Payment fee per sale
Price × Payment fee %

What the payment fee costs you on one sale.

Cost per sale
Product cost × (1 − Refund rate) + Shipping + Other cost per sale + Price × Payment fee %

Everything one sale costs you before advertising.

Margin before ads
Break-even CPA ÷ Price × 100%

The share of each sale’s price left to pay for ads and profit.

Break-even CPA
Price − Refund per sale − Cost per sale

The most you can spend on ads to get one sale before that sale becomes unprofitable.

Break-even ROAS
Price ÷ Break-even CPA

If your ROAS is below this, your ads lose money. Above it, they make money. Excludes other fixed costs.

Target CPA
Break-even CPA − Target margin × Price × (1 − Refund rate)

The most you can spend on ads per sale and still keep your target profit margin.

Target ROAS
Price ÷ Target CPA

The ROAS you need to hit your target profit margin.

Break-even conversion rate
CPC ÷ Break-even CPA × 100%

At your cost per click, the share of clickers who must buy for your ads to break even.

CPA headroom
Break-even CPA − CPA

How much more you could pay per sale before losing money. Negative means each sale already loses money.

Calculator: customer lifetime

Lifetime revenue
Average order value × Purchases per customer

Total a typical customer spends with you over time.

CLV
Break-even CPA × Purchases per customer

Profit before ad costs from a typical customer over all their purchases. Simple margin-based CLV: no discounting or churn modelling.

LTV:CAC
CLV ÷ CPA

How many times over a customer pays back what it cost to acquire them. Above 1× means customers are profitable over their lifetime.

Max profitable CAC
Purchases per customer × Target CPA

The most you can spend to win one new customer and still keep your target margin across all their purchases.

Required conversion rate
CPC ÷ Max profitable CAC × 100%

At your cost per click, the share of clickers who must buy for you to hit your target margin.