What is ROAS?
ROAS is the best-known metric in online advertising. Every ad platform shows it, and it lets you compare campaigns quickly.
But ROAS is about revenue. Whether a campaign makes money depends on what is left of that revenue after cost of goods, shipping, payment fees, commission and returns.
What is a good ROAS?
There is no fixed number. A good ROAS is a ROAS above your break-even ROAS. For a store that keeps a lot per order, 2 can already be profitable; for a store that keeps little and has many returns, 5 may still be a loss.
Example: a campaign costs €1,000 and brings in €4,000 in revenue. ROAS is 4,000 ÷ 1,000 = 4. If your orders leave 40% after order costs, that is €1,600. After the €1,000 in ad spend, €600 remains. At a ROAS of 2, revenue would have been €2,000, €800 after order costs, and you would have lost €200.
What to watch out for
The ROAS in an ad platform is the ROAS according to that platform. Meta and Google each attribute orders to their own ads, so together they often count more revenue than you actually had. And they do not see which orders are returned later.
So put ROAS next to the revenue in your own shop, after returns.
In Ecommy
Ecommy puts ROAS next to POAS and your break-even ROAS, with revenue from your own systems instead of only the platform's numbers.