What is ROAS and why is it important for dropshipping?

ROAS (Return on Ad Spend) measures how much revenue you generate for every dollar spent on advertising. It's crucial for dropshipping businesses because advertising is typically one of the largest expenses, and understanding your required ROAS helps ensure profitability.

What's considered a good ROAS for dropshipping?

Typically, a ROAS of 3-4x is considered good for most dropshipping businesses. However, the "good" ROAS for your specific business depends on your unique cost structure and profit goals, which our calculator helps determine.

How does the calculator determine maximum CPC bids?

Maximum CPC bids are calculated by multiplying your average order value by your conversion rate, then dividing by your required ROAS. This tells you the maximum you can pay per click while maintaining profitability.

Can I use this calculator for any advertising platform?

Yes! The ROAS targets and CPC recommendations apply to all advertising platforms including Facebook Ads, Google Ads, TikTok Ads, and others.

How often should I recalculate my ROAS targets?

It's advisable to recalculate whenever your costs change, when testing new products, or when your profit goals shift. Regular recalculation ensures your advertising strategy remains aligned with your business objectives.

Does this calculator account for multiple products?

The calculator is designed for individual product analysis. For multiple products, calculate the ROAS requirements for each product separately or use your average costs across products.

How does the Breakeven ROAS differ from the Target ROAS?

Breakeven ROAS is the minimum return needed to cover all costs without profit. Target ROAS includes your desired profit margin, providing a higher benchmark for truly successful advertising campaigns.