The formula
Everything that follows is about the two inputs. Get them from the right place, over the same dates, and MER takes thirty seconds. Get them from the wrong place and you will spend a quarter arguing about a number that was never real.
Step 1: revenue from Shopify, not from the platforms
Open Shopify Analytics and take net sales for the month: gross sales minus discounts and returns. Do not use total sales, which includes shipping charged and taxes, and do not use the revenue figure in any ad platform. The whole point of MER is that it reflects what the business banked.
- Set the date range to the calendar month and check the store timezone matches the ad accounts. A store on UK time with an ad account on Pacific time will disagree at the edges of every month.
- Decide once whether shipping revenue is in or out and never change it. Out is cleaner, because shipping revenue is usually offset by shipping cost.
- If you sell on Amazon or wholesale, either exclude that revenue or include the marketing spend that produced it. Never mix one side without the other.
Step 2: spend from every channel
Pull actual spend for the same calendar month from each platform's billing view, not from a dashboard filtered by campaign. Meta, Google, TikTok, Pinterest, affiliate commissions, influencer fees. Then decide on the version you are calculating:
- Media MER counts ad platform spend only. Useful week to week.
- Fully loaded MER adds agency fees, creative production, tooling and any email or SMS platform cost. This is the version the board should see, because it is the one that reconciles to the P&L.
Step 3: divide, then compare to break-even
A worked month for a supplements brand:
| Line | Amount |
|---|---|
| Shopify net sales | £412,000 |
| Meta spend | £58,000 |
| Google spend | £19,000 |
| TikTok spend | £6,000 |
| Media spend total | £83,000 |
| Media MER | 4.96 |
| Agency, creative and tooling | £9,000 |
| Fully loaded MER | 4.48 |
| Contribution margin | 32% |
| Break-even MER (1 ÷ 0.32) | 3.13 |
Fully loaded MER of 4.48 against a break-even of 3.13 means marketing produced contribution beyond its own cost. Multiply MER by margin to say it in pounds: 4.48 × 0.32 = 1.43, so every pound of marketing returned £1.43 of contribution. Check your own month in the MER calculator, which also shows how far the platforms over-claimed.
Step 4: track it weekly, decide on it monthly
A sheet with one row per week and these columns is enough: net sales, spend per channel, total spend, media MER, fully loaded MER, break-even MER, new-customer revenue, aMER. Weekly rows show direction. Monthly totals drive decisions. Daily MER is noise, because orders and spend do not land on the same day.
The mistakes that distort MER
- Gross instead of net sales. Inflates MER by the discount and return rate, which for many brands is 15% or more.
- Spend in the wrong currency or timezone. Ad accounts billed in dollars, a store reporting in pounds, a month boundary that falls at different hours. Normalise before dividing.
- Mixing channels. Amazon revenue with no Amazon ad spend, or wholesale revenue that marketing had nothing to do with.
- Ignoring margin. A rising MER on a falling margin can still be a business going backwards. Always show MER next to break-even MER.
- Reacting to a week. A launch week or a stock-out will swing MER by a point or more. Decide on the month.
Once MER is stable, the next question is which channel deserves the credit, and MER cannot answer it. That is where POAS per channel and incrementality testing take over.
Frequently asked
Which Shopify revenue figure should I use for MER?
Net sales: gross sales minus discounts and returns, excluding shipping and tax. It is the closest Shopify figure to what the business actually banked, and it is the one your accountant will recognise.
Should MER include email and SMS spend?
In the fully loaded version, yes. Klaviyo and similar tools are marketing costs. In a quick media-only MER for weekly direction, leave them out, but be consistent and label which version you are reporting.
Does Shopify show MER natively?
No. Shopify Analytics shows sales; it does not know your ad spend. Several reporting apps calculate MER by connecting ad accounts, or you can do it in a sheet in a few minutes a week.
What is a good MER for a Shopify brand?
One that sits comfortably above your break-even MER, which is 1 divided by contribution margin. A 40% margin store needs at least 2.5; a 25% margin store needs 4.0 just to stand still.
Should I include Amazon revenue in MER?
Only if you also include the Amazon advertising spend that produced it. Mixing one side without the other makes the ratio meaningless. Most brands calculate a separate MER per sales channel.