Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Target MER for your profit goal
3.33
Current MER
4.44
Pure breakeven MER (margin only)
1.82
Current vs. target gap
33.3%
Max monthly spend to hit target MER
$120,000
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How to use this
- 1Enter gross margin (%).
- 2Enter non-marketing fixed costs as % of revenue (%).
- 3Enter target profit margin (%).
- 4Enter current monthly revenue ($).
- 5Enter current monthly marketing spend ($).
- 6Read your target mer for your profit goal on the right — it updates as you type.
- 7Hit Share to keep the scenario or send it to someone.
About this calculator
Marketing efficiency ratio (MER) — total revenue divided by total marketing spend — is the top-line health check most e-commerce and DTC operators watch daily because it's immune to attribution gaming across channels. This calculator works out the breakeven MER for your business given gross margin, fixed overhead you need spend to cover, and a target profit margin, then compares it to your current MER to show exactly how much room (or how much of a hole) you're in. Breakeven MER is simply 1 ÷ contribution margin: at a 40% gross margin, you need at least $2.50 of revenue per $1 of spend just to cover the cost of goods, before touching fixed costs or profit. Add a required contribution toward fixed costs and a target profit, and the true breakeven MER climbs further. This is the same math as breakeven ROAS applied at the whole-account level instead of per-channel, which matters because per-channel ROAS numbers get inflated by cross-channel attribution overlap while total revenue over total spend cannot be gamed the same way.
Worked example
Using the values the calculator loads with:
Inputs
- Gross margin: 55 %
- Non-marketing fixed costs as % of revenue: 15 %
- Target profit margin: 10 %
- Current monthly revenue: 400000 $
- Current monthly marketing spend: 90000 $
Results
- Target MER for your profit goal: 3.33
- Current MER: 4.44
- Pure breakeven MER (margin only): 1.82
- Current vs. target gap: 33.3%
- Max monthly spend to hit target MER: $120,000
What each field means
Inputs
- Gross margin (%)
- The gross margin used in the calculation, measured in %. Starts at 55 % so you have a working example on load. Accepted range: 1–99 %.
- Non-marketing fixed costs as % of revenue (%)
- The non-marketing fixed costs as % of revenue used in the calculation, measured in %. Starts at 15 % so you have a working example on load. Accepted range: 0–90 %.
- Target profit margin (%)
- The target profit margin used in the calculation, measured in %. Starts at 10 % so you have a working example on load. Accepted range: 0–90 %.
- Current monthly revenue ($)
- The current monthly revenue used in the calculation, measured in $. Starts at 400000 $ so you have a working example on load.
- Current monthly marketing spend ($)
- The current monthly marketing spend used in the calculation, measured in $. Starts at 90000 $ so you have a working example on load.
Results
- Target MER for your profit goal
- Returned as a decimal number and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Current MER
- Returned as a decimal number. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Pure breakeven MER (margin only)
- Returned as a decimal number. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Current vs. target gap
- Returned as a percentage. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Max monthly spend to hit target MER
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
How is MER different from ROAS?
ROAS is usually measured per channel or per campaign using platform attribution, which double-counts conversions that touched multiple ads. MER is total revenue over total spend across the whole business, so it can't be inflated by attribution overlap — it's the number that reconciles with your P&L.
Why would target MER be higher than breakeven MER?
Breakeven MER only covers cost of goods sold. Once you add rent, salaries, software, and the profit margin ownership actually wants, the true number you need to hit is meaningfully higher than the point where you're merely not losing money on the goods themselves.
What if my current MER is below breakeven?
You're losing money on marketing-driven revenue even before overhead, which usually means either your paid channels are inefficient, your creative/targeting has drifted, or you're chasing volume at the expense of margin through heavy discounting. Cut spend to the channels and campaigns with the worst MER first.
Does this work for subscription or SaaS businesses?
The mechanics work, but use LTV-based margin instead of first-order gross margin, since a lot of subscription profit comes from renewals, not the first transaction. Pair this with a CAC payback period calculation for a fuller picture.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
Related tools
Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). MER & Blended ROAS Breakeven Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/mer-roas-breakeven-calculator
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/mer-roas-breakeven-calculator" target="_blank" rel="noopener">MER & Blended ROAS Breakeven Calculator — RevenueLab</a> (2026).</p>
Source: [MER & Blended ROAS Breakeven Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/mer-roas-breakeven-calculator) (2026).