What the customer pays, excluding VAT
What you pay your supplier
Your cost to deliver, not what you charge
Payment processor percentage — typically 2–3%
Share of orders returned or refunded
The profit you want to keep, as a share of revenue
Your break-even ROAS
1.84
Below this, the product loses money on every sale.
Your target ROAS
2.26
To keep 10% of revenue as profit.
Contribution per order
€28.50
What is left after costs, before ad spend.
Contribution per order = Price − Product cost − Shipping − (Price × Fee %) Returns-adjusted margin = (Contribution × (1 − Return rate)) ÷ Price Break-even ROAS = 1 ÷ Returns-adjusted margin Target ROAS = 1 ÷ (Returns-adjusted margin − Target net margin)
Assumptions: returns are treated as fully refunded revenue with unrecovered product and shipping cost; VAT is excluded throughout; ROAS is measured against gross revenue, as Google reports it.
Pythago runs this calculation on every product and every campaign continuously, using your real Shopify costs — and tells you which products are currently below their break-even point.
Connect Shopify and Google Ads in under five minutes. From $59/month, cancel anytime, and no campaign changes without your approval.