MER, blended ROAS and the cash to keep growing.

Each advertising platform shows its own version of the sale. Your business needs a shared view. MER, or marketing efficiency ratio, relates total store revenue to total marketing spend over the same period.

Choose a definition and keep it stable

Use revenue after discounts and refunds and excluding VAT where appropriate. State whether the denominator includes media only, or also agency fees, creative production, affiliate commission and other marketing costs. Both views can be useful, but silently switching between them makes comparisons misleading.

For example, £50,000 of net revenue and £10,000 in paid-media spend gives a media-only blended return of 5. Add £2,000 of other marketing costs and the all-in ratio becomes 4.17. Neither is wrong if the definition is clear.

MER is a direction, not an attribution model

It includes sales from returning customers, organic search, email and direct visits. A high MER does not prove paid advertising caused all the revenue. A low ratio during a new-customer campaign may precede repeat purchases, but that explanation needs evidence rather than optimism.

Review new-customer share, contribution after marketing and repeat purchase cohorts alongside MER. Compare comparable periods and account for promotions, stock availability and seasonal demand.

Profit and cash arrive on different schedules

An order can be profitable while the business runs out of cash. You may pay suppliers before stock arrives, pay for ads daily and wait for payment-provider settlements. Returns, VAT liabilities and the next stock order can all fall due before the profit becomes usable cash.

Make a weekly cash forecast with opening cash, expected settlements and committed outgoings. Include supplier deposits, shipping, wages, VAT and planned advertising. Distinguish available cash from amounts reserved for tax and existing obligations.

A budget increase needs two checks

1. Economics: will the expected extra orders leave sufficient contribution after acquisition and fulfilment?
2. Funding: can you pay for those orders, and the stock behind them, until the cash is received?

Stress-test the plan with slower settlements, more returns and lower sales than expected. If a modest delay breaks the forecast, the budget is too aggressive for the current funding position.

A practical weekly review

Keep a single sheet with net revenue, all-channel spend, contribution after marketing, stock cover, cash available and upcoming commitments. Reconcile sales from Shopify or WooCommerce to settlements, rather than copying revenue out of advertising dashboards.

Use daily reports to spot operational problems, weekly reviews to adjust spend and mature monthly cohorts to assess actual returns. Avoid chasing one day’s MER: conversion delay and weekday trading patterns can produce noise. Agree in advance which changes justify action.

The point is to make growth fundable. An impressive ratio is little comfort if the best-selling product cannot be reordered.

All amounts are illustrative. This is an operating framework; ask your accountant to check your revenue, tax and cashflow treatment.

Put it into practice

Bring your store’s numbers to the conversation. We will start there.