What Is a Good ROAS?
There is no universal “good ROAS” — only a ROAS that is profitable for your margin. A 3× ROAS sounds strong until you realize 50% margin businesses break even around 2×, and 25% margin businesses need 4× just to stop losing money.
Good ROAS vs break-even ROAS
Break-even ROAS is the minimum return on ad spend where contribution margin equals ad spend. Good ROAS is anything above that floor — the higher your margin, the lower your break-even ROAS, and the easier it is to be “good” on paper.
Break-even ROAS = 1 ÷ gross margin (when there are no fixed costs per order)
Break-even ROAS by margin
Use this table as a quick sanity check. Fixed costs per order (shipping, payment fees) raise your real break-even ROAS above these figures. See the full 10%–80% margin table.
| Gross margin | Break-even ROAS | Example: good ROAS target |
|---|---|---|
| 25% | 4.00× | 5.00×+ (25% above break-even) |
| 30% | 3.33× | 4.16×+ (25% above break-even) |
| 40% | 2.50× | 3.13×+ (25% above break-even) |
| 50% | 2.00× | 2.50×+ (25% above break-even) |
| 60% | 1.67× | 2.09×+ (25% above break-even) |
| 70% | 1.43× | 1.79×+ (25% above break-even) |
Why generic ROAS targets fail
- “3× ROAS is good” — only true if your margin is ~33% or higher with no fixed costs.
- “4× ROAS minimum” — appropriate around 25% margin, but wasteful if you have 60% margin (break-even ~1.67×).
- Platform ROAS alone — ignores COGS, shipping, and fees; revenue ROAS is not profit ROAS.
Calculate your own threshold
Enter your AOV, margin, and optional fixed costs in the Break-even ROAS Calculator or use the Break-even Ads Calculator for ROAS, CPA, and CPC together.