ROAS Calculator: What Is a Good ROAS?

ROAS — Return on Ad Spend — is the most quoted ecommerce metric and the most misunderstood. A '3x ROAS' tells you nothing about whether you made money.

Why headline ROAS lies

ROAS is just revenue ÷ ad spend. It ignores your cost of goods, your fees, your shipping, and your returns. A 3x ROAS on a 40% COGS product is barely break-even after marketplace fees.

Use True ROAS instead

True ROAS subtracts COGS first. (Revenue − COGS) ÷ Ad Spend. Anything below 1 is a guaranteed loss; anything above 1 is real money you can use.

Calculate your break-even ROAS

Break-even ROAS = 1 ÷ Gross margin. A store with 50% margin needs at least 2x ROAS. A store with 20% margin needs 5x — which is why low-margin products almost never work on paid ads.

Targets that actually mean something

Aim for 1.5–2x your break-even ROAS. That gives you real profit, not just survival. If your blended ROAS is below break-even, pause ads and fix unit economics before scaling.