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E-commerce ROAS & MER Calculator

2025 DTC Profitability Model

Net Ad ROI20%
ROAS3.00x
BE ROAS2.50x

Output Benchmarks

Cash Burn< 2.5x MER
Unsustainable unit economics
Healthy (DTC)3.5x - 4.5x MER
Solid Scaling Zone
Profit Leader> 30% CM
30%+ Contribution Margin

How to use this E-commerce ROAS & MER Calculator

01

Input Data

Enter your current Digital Marketing metrics into the labeled fields above.

02

Analyze Ratios

Instantly view efficiency ratios calculated against elite standards.

03

Optimize

Compare your results with the Benchmarks on the right to find leverage points.

The Core Equation

Total Revenue / Total Ad Spend

Strategic Context

THE STRATEGIC VIEW

DTC profitability in 2025 is a game of "Blended Efficiency." Because of attribution blindness (iOS14), individual channel ROAS is often a distraction. Strategic success requires moving from ROAS to MER (Marketing Efficiency Ratio) and understanding how every dollar of ad spend contributes to the Contribution Margin.

Operational Reality

BEYOND REVENUE: THE MER REALITY

In 2025, individual channel ROAS is a "vanity metric" due to attribution blindness (iOS14+). Professional DTC operators manage by MER (Marketing Efficiency Ratio)—Total Revenue divided by Total Ad Spend. If your MER is 4.0x, you are spending 25% of your revenue on ads.

THE CONTRIBUTION MARGIN (CM)

ROAS is only half the story. To be "Safe," your E-commerce brand needs a 30% Contribution Margin after COGS, Shipping, and Ads. A 3.0x ROAS with 70% margins is a goldmine; a 3.0x ROAS with 20% margins is a bankruptcy trap.

THE BRAND HALO EFFECT

A Facebook Ad "view" often leads to a direct Google search or a TikTok organic purchase 3 days later. This "Halo Effect" means your blended MER is the only source of truth for scaling. If your MER remains stable while scaling spend, you have found market-message fit.

Tactical FAQ

TACTICAL Q&A

Q: What is a "Good" MER for a DTC brand in 2025?
A: A healthy MER is typically 3.0x - 5.0x (20-33% of revenue spent on marketing). If your MER is below 2.5x, your variable costs (COGS + Shipping) likely leave zero room for profit unless you have high-ticket items.
Q: Why does my Facebook ROAS not match my Shopify Revenue?
A: Attribution overlap. Facebook often "claims" credit for a sale that Google also claims. This is why Blended MER is the only way to track true growth profitability in a multi-channel world.
Q: How do returns and shipping impact my ROAS calculation?
A: Most ad dashboards show "Gross Sales," but you live on "Net Sales." If you have a 15% return rate (common in Apparel), your 4.0x ROAS is effectively a 3.4x ROAS. Always factor in your Returns Log when setting your target ROAS.
Q: First Purchase ROAS vs LTV-Based ROAS?
A: If you sell consumables (supplements, beauty), you can afford a 1.0x ROAS on the first purchase because the "Back-end LTV" provides the profit. If you sell one-time purchases (furniture), you need a 3.0x+ ROAS on Day 1.
Recommended Course

Master The System

This calculator is just one tactical step. The full strategy is documented in the core protocol.

Source Lesson

Finance & Capital: Digital Marketing Protocol

Start Lesson →

Related concepts

#CAC#LTV#ROI#CRO