What is a good ROAS? Any ROAS above your break-even ROAS, which is 1 ÷ your profit margin before ad spend. At a 50% margin you break even at 2.0, so 3.0 is healthy; at a 25% margin you break even at 4.0, so 3.0 loses money. The often-quoted 4:1 only works if your margin is above 25%.
That's why two sellers can give opposite answers to the same question: one is happy at 2.5, the other is losing money at 4. This guide shows how to find the ROAS that's good for your products, with a table by margin, the ROAS you need for a target profit, and when a lower ROAS is the better choice. To run your own numbers, our free ROAS calculator shows your ROAS next to your break-even and target ROAS.
- Good ROAS = above break-even ROAS. Break-even ROAS = 1 ÷ margin before ads.
- Margin decides everything: 20% margin needs 5.0 to break even, 40% needs 2.5, 60% needs 1.67.
- Target ROAS = 1 ÷ (margin before ads − profit margin you want after ads).
- Rules of thumb like 3:1 or 4:1 are shortcuts that assume a margin; check yours instead of borrowing someone else's.
- Highest ROAS isn't always best. Spending more at a lower ROAS can earn more total profit, as long as each extra dollar stays above break-even.
What is a good ROAS for ecommerce?
For an online shop, a good ROAS is one that leaves the profit you want after paying for the ads. There isn't a single number, because the ROAS that's needed is set by your margin, not your industry.
You'll see figures like “aim for 4:1” repeated across marketing blogs. Treat them as rough shortcuts, not benchmarks. A 4:1 ROAS means ads cost 25% of the revenue they bring. If the product keeps more than 25% after product cost, fees and shipping, that's profitable. If it keeps less, every ad sale loses money, no matter how good 4:1 sounds.
Break-even and target ROAS by profit margin
Find your margin before ads in the left column. The middle column is the minimum ROAS; the right columns are what you need to keep 10% or 15% of revenue as profit after ads.
| Margin before ads | Break-even ROAS | ROAS for 10% profit after ads | ROAS for 15% profit after ads |
|---|---|---|---|
| 20% | 5.00 | 10.00 | 20.00 |
| 25% | 4.00 | 6.67 | 10.00 |
| 30% | 3.33 | 5.00 | 6.67 |
| 35% | 2.86 | 4.00 | 5.00 |
| 40% | 2.50 | 3.33 | 4.00 |
| 50% | 2.00 | 2.50 | 2.86 |
| 60% | 1.67 | 2.00 | 2.22 |
| 70% | 1.43 | 1.67 | 1.82 |
Formulas: break-even ROAS = 1 ÷ margin; target ROAS = 1 ÷ (margin − target). Notice how fast the required ROAS climbs at thin margins. A 20% margin product needs a 10.0 ROAS to keep 10% profit, which few campaigns reach. For thin-margin products, improving margin or order value usually does more than tweaking ads.
How do I work out my margin before ads?
Subtract every cost of a sale except advertising from the price, then divide by the price.
- Start with the selling price (or your average order value if orders contain several items).
- Subtract product cost: what the item costs you to make or buy.
- Subtract fees: marketplace commission, payment processing, any listing fee.
- Subtract shipping and packing you pay, including free-shipping orders.
- Optionally subtract a returns allowance if returns are common in your category.
- Divide what's left by the price. That's your margin before ads.
The usual mistake is using gross margin (price minus product cost only). That leaves out fees and shipping and makes break-even look far lower than it is. Break-even ROAS walks through a full example where gross margin says 1.43 and the real break-even is 2.76.
Examples: the same ROAS, two different results
Here are two small shops running ads at the same 3.0 ROAS.
| Handmade candle shop | Resold electronics accessory | |
|---|---|---|
| Margin before ads | 55% | 22% |
| Break-even ROAS | 1 ÷ 0.55 = 1.82 | 1 ÷ 0.22 = 4.55 |
| ROAS for 15% profit after ads | 1 ÷ 0.40 = 2.50 | 1 ÷ 0.07 = 14.29 |
| At a 3.0 ROAS | Profitable: about 21.7% kept after ads | Losing about 11.3% of revenue |
For the candle shop, 3.0 is a good ROAS. For the accessory seller, 3.0 is a loss, and even a strong campaign is unlikely to reach 14. That seller's better moves are a cheaper supplier, bundles that raise order value, or putting the ad budget behind higher-margin products. Margin after ads at a given ROAS is margin before ads − 1 ÷ ROAS: 55% − 33.3% = 21.7%, and 22% − 33.3% = −11.3%.
Higher margins mean a lower break-even ROAS. That's not a law of nature, it's arithmetic: if you keep 60 cents of each dollar before ads, an ad only has to return $1.67 per $1 to pay for itself. Resold branded goods with thin margins need far more efficient ads for the same result.
Can a lower ROAS be better?
Yes. Total profit matters more than the ratio, and spending more usually lowers ROAS while still adding profit.
Say your margin before ads is 40% (break-even 2.5). Spending $1,000 brings $5,000 in sales: ROAS 5.0 and $1,000 profit after ads ($5,000 × 0.40 − $1,000). You raise the budget to $3,000 and sales rise to $10,500: ROAS drops to 3.5, but profit after ads is $1,200. The extra $2,000 brought $5,500 in sales, a ROAS of 2.75 on the extra spend, still above break-even. Keep scaling until the extra spend returns about your break-even ROAS, then stop.
A lower ROAS can also make sense for winning new customers who buy again. If you know (from your own order history, not a guess) that a typical new buyer places a second order, you can pay more to win the first one. With a $45 first order and 40% margin, that's $18 of profit per order; if two orders are typical, you could spend up to $36 to win a customer, a first-order ROAS of 1.25. That's riskier: only do it if repeat orders show up in your data. How to calculate customer acquisition cost covers this in more detail.
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Make ad images7 days free · 50 credits · No credit cardIs a ROAS of 2 good? What about 3, 4 or 10?
Each is good above one margin and a loss below it. Use this as a quick check.
| ROAS | Ads cost (ACoS) | Profitable if margin before ads is above |
|---|---|---|
| 1.5 | 66.7% of sales | 66.7% |
| 2.0 | 50% of sales | 50% |
| 3.0 | 33.3% of sales | 33.3% |
| 4.0 | 25% of sales | 25% |
| 5.0 | 20% of sales | 20% |
| 10.0 | 10% of sales | 10% |
A ROAS of 10 is excellent at almost any margin, but very high ROAS on a tiny budget often comes from retargeting people who were going to buy anyway. Check that total sales grow when ad spend grows, not just the platform's ROAS.
How to raise your ROAS when it's below break-even
Either bring in more revenue per ad dollar or lower the break-even itself.
- Raise margin: better supplier price, smaller packaging to cut shipping (see dimensional weight), or a price increase. Raising margin from 25% to 35% drops break-even from 4.0 to 2.86.
- Raise order value: bundles and free-shipping thresholds bring more revenue per click. See how to increase average order value.
- Improve creative: test new images and short videos; ad fatigue lowers ROAS over time.
- Advertise your highest-margin products and let thin-margin items sell organically.
- Measure correctly: follow the steps in how to calculate ROAS so you're comparing spend and sales for the same date range.
Frequently asked questions
What is a good ROAS?
A good ROAS is any ROAS above your break-even ROAS, which is 1 divided by your profit margin before ad spend. With a 40% margin you break even at 2.5, so anything higher is profitable. There's no single good number for every business.
Is a 4:1 ROAS good?
A 4:1 ROAS is profitable if your margin before ads is above 25%, because ads then cost 25% of the sales they bring. If your margin is 20%, a 4:1 ROAS loses money. It's a rule of thumb, not a benchmark.
Is a ROAS of 2 good?
A ROAS of 2 breaks even at a 50% margin before ads and is profitable above that. It works for high-margin products like many handmade, digital or private-label goods, but loses money on thin-margin resold products.
What is a good ROAS for Facebook or Google ads?
The platform doesn't change the math: a good ROAS is still one above 1 divided by your margin before ads. Each platform attributes sales differently, though, so compare a platform's ROAS with its own past results and with your total shop sales, not with another platform's numbers.
How do I calculate my target ROAS?
Target ROAS = 1 ÷ (margin before ads − target profit margin after ads). With a 40% margin and a 15% target, that's 1 ÷ 0.25 = 4.0. If your target is as high as your margin, no ROAS can reach it.
What is a good ACoS on Amazon?
ACoS is 1 divided by ROAS, so a good ACoS is one below your margin before ads. If you keep 30% of each sale before advertising, an ACoS under 30% is profitable and 30% is break-even.
Turn the product photos you already have into white-background, lifestyle and ad-size images, so testing new creative doesn't mean a new photo shoot.
Start free trialSee pricing7 days free · 50 credits · No credit card. Trial images carry a small “Made with aiarter” mark; paid plans export clean files you can use commercially.
