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INSTRUCTIONS: Fill in green and pink cells.
Every single pink cell must be updated - estimate if you are not sure, do not skip or your outputs will be wrong.
Green cells can be adjusted to observe impact on your targets
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COGS & Target ROAS calculatorNOTESNOTES
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Enter wanted Profit per transaction (contribution margin)$40Enter how much profit you want per transactionThis is your choice, try different scenarios and see how it impacts your marketing goals. Lower = faster growth, more scale, less profit. Higher = slower growth, less scale, higher gross profit.
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Target monthly revenue including VAT/Tax $100,000Enter your monthly target revenue
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AVERAGE PRODUCT / FULFILMENT COSTS
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Average Order Value including tax/VAT$85.00 Enter Your Average
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Cost of goods (product cost)$25.00 Enter Your Average
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VAT/GST $0.00 Enter Your Average
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Disputes fees$0.00 Enter Your Average
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Payment processor fees $0.00 Enter Your Average
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Refund rate (base on percentage)$0.00 Enter Your Average
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Packaging$0.00 Enter Your Average
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Shipping costs$5.00 Enter Your Average
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Fullfilment costs per unit$0.00 Enter Your Average
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Storage fees $0.00 Enter Your Average
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Monthly overheads (eg salaries, rent etc) $0 Enter Your Average
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CPC (Cost Per Click) $1.50Enter Your AverageIf you have not run ads before leave this at $1.50
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Total costs of product & to fulfill$30.00 Formula don't change
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Percentage COST35%Formula don't change
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Gross Profit Margin (percentage)65%Formula don't changeGross margin is equal to store revenue less VAT, less cost of goods sold as a percent of total revenue.
*Note that accountants will define it differently as they remove VAT first.
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Gross profit Margin (per order) $55.00 Formula don't change
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Marketing goals
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Breakeven CAC $55.00 Formula don't changeThis is the customer acquisition cost you will need to cover product COGS and marketing costs.
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CAC target with desired profit$15.00 Formula don't changeThis is how much your customer acquisition cost needs to be to hit your profit per transaction.
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Breakeven ROAS1.55Formula don't changeThis is your ROAS to cover product COGS and marketing costs.
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ROAS Target with desired profit5.67Formula don't changeThis is what your ROAS needs to be to give you your desired profit per transaction. Industry average = 2
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CVR to hit goal10%Formula don't changeIndustry average is 1-4%. If yours is much higher this may be unviable. Adjust B4. Assumes all traffic comes from paid.
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Monthly revenue to break even on overheads/marketing$0Formula don't changeAssumes all revenue coming from paid sources - see Forecast tab for other scenarios
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Marketing spend required to hit revenue goal $17,647Formula don't changeThis is the media spend required, assuming you hit your CAC goal at the scale you want
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Net Profit after overheads/COGS/Marketing if revenue goal hit$47,059Formula don't changeThis is what is left for the owner, or to purchase more product, invest back into the business. Assumes all revenue comes from paid
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Net Profit percentage47%Formula don't changeIndustry average is 10-20% depending on maturity of the business and how aggressive growth is.
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NOTES
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*A rule of thumb is your CAC to LTV ratio should be 1:3. So over the lifetime of your customer you should make back that CAC 3X
*Generally a 'good' eCommerce business will net out at 10-20% Net profit
*Gross profit should be well above 50% to be scalable, unless you have a viral product which will out perform averages
*Average ROAS industry-wide is around 2.5X in platform and and 5X when blended with organic channels
*Note that there is a big difference between in your in-platform CAC and your blended CAC when you combine it with
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