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Is Your Ecommerce Advertising Profitable?

Calculate whether your Meta (Facebook & Instagram) ads are profitable at a unit level. Know your true cost per acquisition, ROAS, and profit per order.

Quick start: Enter your product costs and ad metrics to see if each sale from Meta ads is profitable. Uses NZ ecommerce benchmarks as defaults.

Product Economics

$

Average amount a customer spends per order

$

Product cost including manufacturing or wholesale price

$

Average shipping, packaging, fulfillment cost per order

$

Payment processing fees (e.g. Stripe ~2.9% + $0.30)

Meta Ad Metrics

$

Cost per 1,000 impressions. NZ ecommerce avg $10-25.

%

Click-through rate. Ecommerce avg 1-2%.

%

% of visitors who purchase. Avg 1.5-3.5%.

This calculator provides estimates based on the inputs you provide. Actual results depend on creative quality, audience targeting, seasonality, and other factors.

Understanding Ecommerce Unit Economics

Unit economics tells you whether each individual sale from your Meta ads is actually profitable after all costs are accounted for. Many ecommerce businesses focus on topline ROAS without understanding the true picture.

What is ROAS?

Return on Ad Spend (ROAS) measures how much revenue you earn for every dollar spent on advertising. A 3x ROAS means you generate $3 in revenue for every $1 in ad spend.

ROAS = Revenue / Ad Spend

What is Breakeven ROAS?

Your breakeven ROAS is the minimum ROAS you need to cover all your product costs. It's calculated as:

Breakeven ROAS = AOV / Gross Margin

For example, if your AOV is $75 and your gross margin (after COGS, shipping, and fees) is $39, your breakeven ROAS is 1.92x. Anything above that is profit.

How to improve your unit economics

  • Increase AOV: Bundles, upsells, and cross-sells can lift your average order value
  • Reduce COGS: Negotiate better supplier rates or optimise your supply chain
  • Improve CTR: Better creative and targeting lowers your effective CPC
  • Improve conversion rate: Optimise landing pages, checkout flow, and product pages
  • Build repeat purchases: Email marketing and loyalty programmes dramatically improve blended CPA

Want to see how break-even works for service businesses? Try our Break-even Calculator. Or calculate your overall customer profitability with our Customer Profitability Calculator.

Want Help Scaling Your Ecommerce Ads Profitably?

Book a free strategy call and we'll analyse your Meta ad performance, identify opportunities to improve your ROAS, and create a plan for profitable growth.

Book Your Free Strategy Call