How much can you spend to acquire a product order?
A revenue target does not tell you how much you can afford to spend finding a customer. Start with the costs around the sale.
Open the Break-Even ROAS Calculator →Find the money available before advertising
Start with revenue excluding collected tax, then deduct the non-ad variable costs of that order. Include the product, fulfilment, applicable seller fees and a reasonable return assumption. The amount left is the first-order contribution available before acquisition spend.
If a £30 order has £18 non-ad variable costs, £12 remains. Spending all £12 on acquisition would leave no contribution for wider expenses. To retain £5 under that scenario, the maximum advertising allowance is £7 per order.
Define which orders and costs you are comparing
Advertising spend divided by attributed orders gives a cost-per-order measure. Advertising spend divided by new customers is a different customer-acquisition measure. A customer placing two orders can make the two denominators differ, so state clearly which decision the figure supports.
Include relevant paid acquisition costs in the comparison and use a consistent period. Refunds, attribution delays and cancelled orders can change the denominator. A campaign report's revenue total is not necessarily the same as completed business revenue.
Keep repeat-purchase value separate until measured
A business with established repeat orders may choose to assess longer-term customer value. That requires evidence of retention, order contribution and a defined time window. A new shop should not justify a loss on the first order merely by assuming that each buyer will purchase again.
Keep a first-order limit alongside any longer-term analysis. Test a lower repeat rate and consider cash timing. Acquisition spend is paid before future orders are certain, so even a plausible long-term scenario can create a cash requirement the business cannot comfortably support.
A worked example
An order contributes £15 before ads. If you want to keep £6 toward overhead and profit, the acquisition-cost target is no more than £9 under those assumptions.
Before you use the result
- Subtract non-ad variable costs from the actual revenue basis.
- Choose the contribution you want to retain.
- Name the denominator: orders or new customers.
- Account for refunds and the reporting period.
- Use measured repeat-order evidence before relying on lifetime value.
Common questions
Is the maximum ad spend a recommended budget?
It is a cost limit under the entered assumptions, not an instruction to spend it or a prediction of results. Start with an appropriately controlled test and review actual contribution and cash needs.
Can a campaign with high revenue still lose money?
Yes. If acquisition and fulfilment costs exceed the contribution available, revenue can increase while the loss grows. Compare the order economics and wider costs, not revenue alone.
Put the numbers into practice
Break-Even ROAS Calculator →How to calculate break-even ROAS from product costs →How to calculate product return costs and a return allowance →Cash flow vs profit: why a product can tie up cash →A practical calculation guide, not professional accounting, legal or tax advice. Examples are illustrative unless identified as official. Calculation methodology and limitations.