eCommerce ROI Calculator
Return on investment and return on ad spend answer different questions, and only one of them is about money you keep. This works out both from the same five inputs, so the gap between them is visible on your own numbers rather than argued about in a meeting.
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FORMULA
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A 5x ROAS on a 32% margin is a 33% return. Both numbers are true; only one pays the wages.
- The calculator
What did the investment actually return?
Five inputs. Change any of them and every figure updates as you type.
Formula: contribution = revenue × contribution margin. Investment = media spend + other costs. ROI = (contribution − investment) ÷ investment. The twelve-month figure multiplies contribution by orders per customer while leaving the investment unchanged, which assumes repeat orders carry the same margin and cost nothing further to win — use it only if your cohort data supports it. Nothing is sent anywhere; this runs entirely in your browser.
- Reading it
Why ROI and ROAS disagree
They are not two ways of saying the same thing. One counts revenue, the other counts what you keep.
ROAS divides revenue by media spend. It ignores the cost of the goods, the delivery, the returns and everything you paid that was not media. On a healthy-looking 5x ROAS at a 32% contribution margin, the return on investment is about a third — real, but nothing like the impression the first number leaves.
The gap widens as margin falls and as the non-media costs grow. That is why an agency retainer, creative production and tooling belong in the second input: leaving them out produces a number that flatters the arrangement rather than describing it. ROAS is a steering metric for a campaign; ROI is how the investment is judged.
- Use contribution margin, not gross margin, or the answer is still too flattering
- Count every cost you would not have had without the campaign
- Judge the first-order ROI before relying on the twelve-month one
- Getting it wrong
Four ways ROI gets overstated
Each of these makes the return look larger than it is, which is the direction that gets budgets approved.
Using revenue instead of contribution
The single biggest error. Revenue is not a return; it is a number that has to have goods, delivery and returns taken out of it before anything is left.
Counting media spend as the whole investment
Retainers, creative, freelancers and software are part of what you put in. Excluding them can double the reported ROI on a small campaign.
Double-counting attributed revenue
If every platform claims the same order, summing their reported revenue produces a total larger than the business took. Reconcile to the accounts first.
Assuming repeat revenue that has not happened
Twelve-month ROI is a forecast, not a result. It is defensible with cohort data behind it and wishful without.
The marketing guide covers the reporting model that keeps these four out of a board pack.
- Questions
eCommerce ROI FAQs
The questions this calculator usually raises.
What is the difference between ROI and ROAS?
ROAS is revenue divided by media spend. ROI is what you keep, minus everything you spent, as a share of what you spent. A campaign can have an excellent ROAS and a negative ROI if the margin is thin or the non-media costs are large. The calculator shows both so the difference is visible on your own numbers.
What counts as the investment?
Everything you would not have spent without the campaign: media, agency fees, creative production, photography, tooling, and internal time if you are costing it. Leaving the non-media items out is the most common reason a reported ROI does not survive contact with the finance team.
Should I use gross margin or contribution margin?
Contribution. Gross margin stops at the cost of the goods and ignores payment fees, pick and pack, delivery and returns — all of which come out before marketing does. Our profit margin calculator works it out if you do not have the figure.
What is a good ROI for eCommerce marketing?
There is no universal figure, which is why this tool does not print one. What matters is whether the return clears the cost of the capital funding it and beats the next best use of that money. A positive ROI on a campaign that ties up cash for six months is not automatically a good decision.
Why is the twelve-month figure so much higher?
Because repeat orders carry contribution without a second acquisition cost. That is real, and it is also the assumption most likely to be wrong. Set orders per customer to 1 to see the honest first-order result, then raise it only as far as your cohort data supports.
Can I use this for a whole channel rather than a campaign?
Yes, and it is usually more honest at that level, because channel-level revenue is easier to reconcile against the accounts than campaign-level attributed revenue. Blended is better still — total marketing cost against total contribution.
- Next
Related tools and reading
CALCULATOR
Work out the contribution margin this calculator asks for, from your price and cost lines.
CALCULATOR
The floor a campaign has to clear before any of this return exists at all.
FREE AUDIT
Five working days across six disciplines, including whether reported returns reconcile to the accounts.
ROAS healthy, ROI thin?
That gap is usually margin, non-media cost, or revenue being counted twice. The free audit reconciles reported performance against what the business actually took.