Stop guessing your Meta & Google ad bids. Input your cost parameters, AOV, and desired margins to find the absolute maximum Cost Per Purchase (CPA) or Cost Per Click (CPC) you can pay without taking a loss.
**Target CPA (Cost Per Acquisition)** is a bidding strategy utilized in advertising networks like Meta Ads and Google Ads. It specifies the maximum average cost you want to pay for a conversion (sale). To maintain profitability, your target CPA must remain lower than your product's leftover gross margin after subtracting manufacturing cost, transport logistics, and platform commissions.
ROAS (Return on Ad Spend) is directly correlated with CPA. While CPA is a cost metric (₹ spent per purchase), ROAS is a multiplier. The conversion formula is:
If your target CPA is too low (e.g. under ₹150) and your ads are not spending, you must either: 1. Increase your Average Order Value (AOV) via product bundles. 2. Squeeze supply chain costs (COGS) to increase the leftover margin.