Is your Shopify store actually profitable?

Understanding the metrics

ROAS (Return on Ad Spend): Revenue generated per dollar spent on ads.

MER (Marketing Efficiency Ratio): Total revenue divided by total ad spend. The honest number when attribution is messy.

Conversion Rate: Percentage of visitors who complete a purchase.

AOV (Average Order Value): Revenue divided by number of orders.

Ad Cost per Purchase: Ad spend divided by purchases. Compare it to your margin per order, not to a benchmark.

What good looks like, roughly

Benchmarks are dangerous when treated as targets, because a healthy number for a $200 skincare set is a disaster for a $19 accessory. Use these as a sanity check on whether a metric deserves your attention this month, not as a goal.

Why MER matters more than platform ROAS

Ad platforms report the conversions they believe they caused. After the iOS tracking changes and the shift to modelled attribution, that belief is generous. Two platforms will each claim the same order, and your dashboard will show more revenue attributed than your bank account received.

MER sidesteps the argument entirely. Total revenue divided by total ad spend cannot be inflated by attribution windows, because both numbers come from outside the ad platform. When in-platform ROAS climbs while MER falls, the platform is claiming credit for orders it did not create. That divergence is the single most useful signal in paid media, and it only appears if you track both.

Reading the results honestly

Three traps worth naming, because they cause more bad decisions than any missing metric:

• Judging a month by one number. A rising AOV alongside a falling conversion rate can be a price increase working exactly as intended, or your best-value product going out of stock. The number alone does not distinguish them.
• Optimising the metric that is easiest to move. Conversion rate responds quickly to a popup, which is why so much CRO work is popups. Whether contribution margin improved is a different question.
• Comparing to someone else's benchmark. Your break-even ROAS is set by your margins, not by an industry average. Calculate it in the discount and pricing calculator and use that as your floor instead.

Every tool here does one calculation properly and tells you what the answer means. They are the spreadsheets I kept rebuilding while running operations for a Shopify brand, which is also why there is no signup on any of them.