What Is a Good ROAS? How to Find Yours (with a Free Calculator)

A good ROAS is any ROAS above your break-even ROAS, and your break-even ROAS is simply 1 divided by your margin. If you keep 40% of each sale after product and shipping costs, you break even at a ROAS of 2.5. Anything above that makes money on the first order, anything below it loses money unless customers come back.

That’s why “4x is a good ROAS” is only true for some businesses. Below: how to work out your number, why the ROAS in Meta and Google is usually higher than what you really earn, and a worked example. You can also skip ahead to our free ROAS calculator, which does the maths for you.

ROAS in one line

ROAS (return on ad spend) is the revenue your ads bring in divided by what you spent on them.

You spend $1,000 on ads and they bring in $4,000 in sales. Your ROAS is 4,000 ÷ 1,000 = 4, sometimes written 4x or 400%.

It measures revenue, not profit. A ROAS of 4 means $4 of sales for every $1 of ads, before you pay for the products, shipping, payment fees and everything else.

What is a good ROAS? It depends on your margin

The question to ask isn’t “what’s a good ROAS” but “what ROAS do I need to break even?”

Your break-even ROAS is the point where the ads pay for themselves and nothing more:

Break-even ROAS = 1 ÷ margin

Use your margin after the cost of the product, shipping and payment fees, but before ads. If you sell a $100 item that costs you $55 to buy, ship and process, your margin is 45% and your break-even ROAS is 1 ÷ 0.45 = 2.2.

So a ROAS of 3 is a loss for a store with a 25% margin and a healthy profit for a store with a 60% margin. Same number, opposite outcome.

Our ROAS calculator works this out from your margin and shows your profit after ads, your cost per purchase and how many orders you need.

ROAS vs real profit

Even above break-even, a ROAS figure leaves out things that eat into profit:

• Returns and refunds. Ad platforms count the sale when it happens. If 10% of orders come back, your real ROAS is lower.
• Discounts. A 20% off code lowers the order value, and with it your margin. Your break-even ROAS goes up during a sale.
• Fixed costs. Agency fees, creative, software and your own time aren’t in ROAS. A campaign can sit above break-even and still not cover the work behind it.

On the other side, ROAS also undercounts one big thing:

• Repeat customers. ROAS looks at the first order. If a new customer buys three times over the year, the ad that found them was worth far more than its ROAS shows. This is why ads aimed at new customers almost always show a low ROAS, and why that’s not automatically a problem (more on that below).

The working rule: use break-even ROAS to judge campaigns that sell to existing customers, and judge new-customer campaigns on cost per new customer compared with what a customer is worth to you over a year.

Why Meta and Google show a higher ROAS than your store

If you’ve ever added up the sales Meta and Google each claim and got more than your store actually made, you’re not imagining it. Each platform counts every sale it touched, by its own rules:

• Meta’s default counts a sale if someone clicked your ad in the 7 days before buying, or just saw it in the 24 hours before. A lot of those people were going to buy anyway.
• Google Ads counts a sale after a click within its own window (30 days by default for most conversion actions) and Performance Max takes credit across Search, Shopping, YouTube and more.
• Google Analytics usually gives the sale to the last channel clicked, so it undercounts Meta, where many people see an ad on their phone and buy later from another device.

Both platforms can claim the same order. Neither is lying; they’re answering different questions.

So which ROAS do you trust? We treat the platform’s number as the ceiling, Analytics as the floor, and judge the account on blended ROAS:

Blended ROAS = total online revenue ÷ total ad spend (all platforms)

It’s the one number that can’t double-count. If blended ROAS holds or rises while you scale spend, the ads are working, whatever each platform says.

A worked example

A worked example

These numbers are made up to show the method. They don’t come from a client account.

A Quebec online store has an average order of $60 and keeps 40% of each sale after product, shipping and payment fees. Its break-even ROAS is 1 ÷ 0.40 = 2.5.

In one month it spends $2,000 on Meta and $1,000 on Google Ads:

• Meta reports $12,000 in sales: a ROAS of 6.0.
• Google Ads reports $5,000: a ROAS of 5.0.
• Together, the platforms claim $17,000. The store’s own records show $13,500 in online sales for the month, and that includes orders from email, organic search and people typing the address.

Blended ROAS is $13,500 ÷ $3,000 = 4.5. That’s well above break-even, so the ads are working. But 4.5 is the number to plan with, not 6.

Now look at the new-customer campaign inside the Meta budget: $800 spent, 32 first orders. Meta shows a ROAS of 2.4, just under break-even, so it looks like the weakest campaign. But each new customer cost $25. If a typical customer orders three times a year, each one brings in about $72 of margin ($60 × 40% × 3). Paying $25 to get $72 back is a good deal.

What we take from it:

1. Don’t add up the platforms’ numbers. Each one counts the sales it touched, and many orders get counted twice.
2. Don’t kill new-customer campaigns for a low ROAS. Judge them on cost per first purchase against what a customer spends with you over a year.
3. Judge the whole account on blended ROAS, month over month, not on one platform’s dashboard.

So, what ROAS should you aim for?

A practical way to set a target:

1. Work out your break-even ROAS (1 ÷ margin). That’s the floor.
2. Set your target about 30% to 50% above it for campaigns aimed at people who already know you, so there’s room for returns, discounts and fixed costs. With a 40% margin, that’s a target of about 3.3 to 3.8 on the platform’s number.
3. Accept a lower ROAS on new-customer campaigns if the cost per new customer makes sense over a year.
4. Check blended ROAS every month. If it falls while platform ROAS looks fine, the platforms are crediting each other’s sales.

If you run Google Ads, our guide to what Google Ads costs a small business in Canada covers budgets, and our breakdown of Facebook and Instagram ad costs does the same for Meta. To check your tracking is counting sales properly in the first place, use the conversion tracking checklist.

Want a second opinion on your numbers? We look at ROAS the same way for every paid media client, across Google Ads and Meta ads, starting from your margin and your blended revenue. Book a free audit and we’ll tell you what your real ROAS is.

FAQ

Is a ROAS of 4 good? It depends on your margin. A ROAS of 4 means you break even at a 25% margin. If your margin is 50%, a ROAS of 4 is a solid profit; if it’s 20%, you’re losing money on every sale.

What’s the difference between ROAS and ROI? ROAS compares revenue to ad spend. ROI compares profit to the total cost (ads, products, fees, your time). A campaign can have a ROAS of 3 and a negative ROI if margins are thin.

What’s a good ROAS for a Shopify store? There’s no Shopify-wide number. Many independent stores have margins between 30% and 60%, which puts break-even between about 1.7 and 3.3. Work out yours with the ROAS calculator and aim above it.

Why is my ROAS in Meta higher than in Google Analytics? Meta counts sales from people who saw an ad without clicking, and sales up to 7 days after a click, on any device. Analytics usually credits the last click. The truth is in between, which is why we judge on blended ROAS.

How do I calculate break-even ROAS? Divide 1 by your margin before ads. With a 40% margin: 1 ÷ 0.40 = 2.5.