E-Commerce Financial Calculator

Marketing Efficiency Ratio (MER) & Contribution Margin Calculator

Platform-reported ROAS hides audience fatigue and returning-customer attribution illusions. Calculate your true blended Marketing Efficiency Ratio (MER), net contribution profit ($ and %), and first-order break-even threshold.

📊 E-Commerce MER & Contribution Margin Calculator

Calculate your true blended Marketing Efficiency Ratio (MER) and post-ad contribution profit to ensure paid media generates cash, not just dashboard ROAS.

$
$
%
%
%
Blended Marketing Efficiency Ratio (MER)
3.40x
24.2% Contribution Margin
Net Contribution Profit
$23,535
Cash left after all ads & COGS
Break-Even MER Required
1.75x
Minimum allowable blended MER
🟢
Healthy Scale: High contribution margin. Strong economics to scale ad spend.

MER vs. ROAS: Why MER Governs E-Commerce Cash Flow

Advertising dashboards (like Meta Ads Manager or Google Ads) report return on ad spend (ROAS) based on browser cookies and click models. These platforms routinely take credit for sales that would have happened organically or through brand search. In contrast, Marketing Efficiency Ratio (MER) measures blended store revenue divided by total paid ad spend across all channels:

Marketing Efficiency Ratio (MER) = Total Gross Store Revenue / Total Ad Spend
Break-Even MER = 100 / (100 - COGS% - Shipping% - PaymentFees%)

Industry MER & Margin Benchmarks

Gross Margin Tier Break-Even MER Target Sustainable MER Target Aggressive Scale MER
High Margin (75%–85%)
Apparel, Digital, Niche DTC
1.18x – 1.33x 2.50x – 3.20x 3.80x+
Mid-High Margin (60%–74%)
Beauty, Skincare, Supplements
1.35x – 1.66x 3.00x – 3.80x 4.20x+
Standard Retail (50%–59%)
Footwear, Home Goods, Hardlines
1.70x – 2.00x 3.50x – 4.50x 5.00x+
Thin Margin (< 50%)
Electronics, Consumables, Resellers
2.10x – 2.50x+ 4.50x – 6.00x 6.50x+

Read our in-depth tactical guide: Marketing Efficiency Ratio (MER) Benchmarks: What Healthy E-Commerce Brands Maintain and Calculating True New Customer CAC.

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