What is a good ROAS?

Why there is no fixed number

You often hear numbers like 'a ROAS of 4 is good'. But ROAS is about revenue, and what a euro of revenue is worth differs per store and per product. A store that keeps a lot per order and has few returns already makes money at a low ROAS. A store that keeps little and has many returns can still lose money at a high ROAS.

Calculate your own line

Take an average order and subtract all the costs that belong to it: cost of goods, shipping, payment fees, commission and returns. Divide what is left by the revenue. That is your profit percentage after order costs. Divide 1 by that percentage, and you have your break-even ROAS.

Example: an order of €100 leaves €40 after all order costs. That is 40%, so the break-even ROAS is 1 ÷ 0.40 = 2.5. A campaign with a ROAS of 4 then makes money; a campaign with a ROAS of 2 costs money.

Per product and per channel

Your average break-even ROAS is a start, but campaigns rarely sell the average. A campaign on a product with many returns needs a higher line. So calculate per product or product group, and per channel if the costs differ.

Which ROAS do you compare it with?

The ROAS in Meta or Google is the ROAS according to that platform. It counts revenue that may still be returned, and every platform likes to credit orders to itself. So compare your break-even ROAS with the revenue in your own shop, after returns.

Or steer on profit directly

If you know the profit after order costs per order, you can also calculate POAS directly: profit divided by ad spend. Above 1 a campaign makes money, below 1 it does not. That is easier to read than a ROAS next to a line.