High ROAS, no profit? How to work out what each order really makes
Break-even ROAS, profit per order, and why the ROAS in Meta includes GST.
Guides · Tools · Community
The finance playbook built for eCommerce
Practical finance advice from accountants and founders, helping you to build a more profitable online business.
Why your payout isn’t your revenueExample
Gross sales$12,480.00
Refunds−$640.00
Shopify Payments fees−$297.40
Afterpay (paid separately)−$1,915.00
Deposited to your bank$9,627.60
The Horizon blog
New to Horizon? Start with these
Everything you need to finally make sense of your numbers.
New
Shopify + Xero
How to reconcile Shopify payouts in Xero (and why they never match your bank)
Fees, refunds, holds, Afterpay and PayPal, and the clearing-account setup that makes every payout line up, with a worked example.
Read the guide
Profit
Cash flow
How to fund Black Friday stock without a cash crunch
How much stock to buy, how to fund it, and planning around provisional tax in NZ and BAS and PAYG in Australia.
Margins
Landed cost: what it is, how to calculate it, and why your Shopify margin is wrong
Freight, duty, broker fees and exchange rates, where they go in Xero, and why import GST doesn’t count.
Tax
Why you owe tax when your cash is tied up in stock
How stock affects your tax bill, plus the year-end stocktake shortcuts for small businesses in NZ and Australia.
Selling overseas
Selling across the Ditch: when you need NZ or Australian GST
The NZ$60,000 and A$75,000 thresholds, GST on shipping and exports, plus UK VAT and US sales tax.
Nothing here yet. Subscribe and we’ll send it when it’s out.
Tools
What does each order really make you?
Your ad dashboard shows ROAS. This shows profit. Change the numbers to match your store.
Your real profit per order$0.00
What Meta calls your ROAS0x
ROAS you need to break even0x
Order value (incl. GST)
GST (15%)
Product (landed)
Shipping & packaging
Fees
Returns
Ads
Estimates only, for general information. Assumes you’re GST-registered and claim GST on your costs. Excludes overheads, staff, apps and income tax.
Community
Run the playbook with other founders
A space for Kiwi and Aussie eCommerce founders to swap notes on Xero setups, apps, 3PLs, pricing and cash flow, and ask the questions you can’t ask your competitors.
- Ask-me-anything sessions on tax, margins and stock
- Templates and checklists before GST, BAS and year-end
- Honest app and tool comparisons from other founders
The Horizon Playbook
A new guide in your inbox every fortnight
- New guides and tools as they’re published
- Reminders before GST, provisional tax and BAS dates
- IRD and ATO changes that affect online sellers
Quick answers
Short answers to the questions eCommerce founders ask most. The full guides go deeper.
Why don’t my Shopify payouts match my bank in Xero?
Payouts arrive after fees, refunds and holds are taken out, and gateways like Afterpay and PayPal pay separately. If deposits are recorded as sales, both your revenue and your margin are wrong. The usual fix is a clearing account for each gateway and a connector such as A2X or Link My Books.
Is a good ROAS the same as being profitable?
No. ROAS compares ad-attributed revenue with ad spend only. It ignores product and freight costs, shipping, payment fees, discounts and returns, so a campaign can show a strong ROAS and still lose money on every order. Try the calculator.
Why do I owe tax when all my cash is tied up in stock?
Stock you buy generally isn’t deductible until it’s sold. If your inventory grew during the year, part of your profit is sitting on shelves rather than in the bank, but it can still be taxable.
What is a landed cost and why does it matter?
Landed cost is the full cost of getting stock to your door: the supplier price plus freight, insurance, duty, customs and broker fees, and exchange-rate movements. If those extras sit in general expenses instead of cost of goods sold, your gross margin looks better than it really is.
When do I need to register for GST in New Zealand or Australia?
In New Zealand, generally once your turnover is over NZ$60,000 in a 12-month period, or is expected to be. In Australia, generally once your GST turnover reaches A$75,000 a year. Selling across the Tasman can also mean registering in the other country.
Do I charge GST on shipping?
Generally yes. If you’re GST-registered, shipping you charge to a customer in New Zealand or Australia is part of the sale, so GST applies at 15% in NZ and 10% in Australia. Orders shipped overseas are generally zero-rated.
Is Shopify charging me GST on its fees?
It may be. If you’re GST-registered, add your NZ GST number or Australian ABN in Shopify’s billing settings. Otherwise Shopify can charge GST on your subscription, apps and shipping labels, which is an easy cost to miss.
About Horizon
Written by accountants and founders, for eCommerce
Horizon is an independent publication for New Zealand and Australian online brands. Most finance advice is written for every kind of business. Every guide here is written for founders selling on Shopify, WooCommerce and Amazon.
1
eCommerce only
Payouts, stock, landed costs, ad spend and selling overseas. Nothing generic.
2
NZ and Australia
GST, provisional tax, BAS, PAYG and importing, with IRD and ATO rules compared.