Start with contribution
A download has no postage cost, but that does not make every sale profitable. Payment fees, refunds, acquisition, support time, exchange rates and production costs still matter.
Start with the contribution from one sale before acquisition. Keep the rate and the fixed fee separate; low-priced products are especially sensitive to a fixed per-order charge.
Contribution before acquisition = price × (1 − refund rate − fee rate) − fixed fee per order
This simplified model charges fees on gross sales and treats refunds as a reduction in revenue. Your provider may treat returned payment fees differently; replace the model if your actual terms require it.
A worked example
The following numbers are illustrative assumptions, not current platform fee quotes or measured advertising results.
| Input or result | Example |
|---|---|
| Product price | $50.00 |
| Percentage fee | 3% |
| Fixed fee per order | $1.00 |
| Refund assumption | 5% |
| Acquisition cost per paid order | $20.00 |
| Contribution before acquisition | $45.00 |
| Contribution after acquisition | $25.00 |
| Ten orders, less $40 fixed costs | $210.00 |
At these assumptions, a paid customer can cost up to $45 before contribution reaches zero, excluding fixed costs. That is a break-even limit, not a comfortable acquisition target.
Know what ROAS leaves out
Revenue divided by advertising spend is not the same as profit. A platform may count attributed revenue on a different date from when money is collected, and refunds or fees may not be included.
In the example, simplified break-even ROAS is $50 ÷ $45, about 1.11×. Fixed costs raise the revenue required to cover the whole operation. If fees and refunds leave no positive contribution, break-even ROAS is undefined.
Change the offer honestly
Compare a focused single tool with a relevant bundle. A bundle is useful only when the additional files solve related tasks; adding unrelated files does not create business value by itself.
Do not justify a price with a competitor’s unverified revenue, an expired discount or a made-up list price. Review the actual content, support burden, license and buying context.
Write down your assumptions
- Record your actual platform terms, fee currency and fixed charges.
- Keep refund and acquisition assumptions explicit rather than hiding them in a margin percentage.
- Compare several prices and acquisition-cost scenarios.
- Include production, maintenance and support effort when deciding whether the operation is worth continuing.
Use the free calculator to explore the arithmetic. It does not replace tax, accounting or financial advice.