What's a Good ROAS? Benchmarks by Industry
There is no universal "good ROAS" — it depends on your gross margin. The table below shows break-even ROAS by typical COGS range and target ROAS for major e-commerce and digital verticals.
| Industry | Typical COGS % | Break-Even ROAS | Target ROAS | Margin Type |
|---|---|---|---|---|
| Fashion & Apparel | 35–45% | 1.54–1.82× | 4–8× | High |
| Beauty & Cosmetics | 25–40% | 1.33–1.67× | 4–7× | High |
| SaaS / Software | 15–25% | 1.18–1.33× | 3–5× | High |
| Home & Furniture | 40–55% | 1.67–2.22× | 3–6× | Mid |
| Electronics | 60–75% | 2.50–4.00× | 4–8× | Mid |
| Food & Grocery | 65–80% | 2.86–5.00× | 6–10× | Low |
| B2B Lead Gen | 20–35% | 1.25–1.54× | 2–4× | High |
How the Calculator Works
Every output uses one of these formulas. No black boxes — you can verify every number yourself.
| Output | Formula | What It Tells You |
|---|---|---|
| ROAS | Revenue ÷ Ad Spend | Revenue per $1 of ads |
| Profit | (Revenue × Gross Margin) − Ad Spend | Money left after goods and ads |
| Break-Even ROAS | 1 ÷ (1 − COGS%) | Minimum ROAS to cover COGS + ad spend |
| Gross Profit | Revenue × (1 − COGS%) | Revenue remaining after cost of goods |
| Margin on Ad Spend | Profit ÷ Ad Spend | Profit multiple per ad dollar — the real return |
Color coding is margin-relative: green = ROAS more than 2× your break-even (healthy), yellow = 1–2× break-even (marginal), red = below break-even (losing money on ad spend).
Frequently Asked Questions
What does ROAS mean?
ROAS stands for Return on Ad Spend. It measures how much revenue you generate for every dollar spent on advertising. A 5× ROAS means $5 in revenue per $1 spent. It is a revenue metric — not a profit metric — which is why this calculator adds profit and break-even ROAS to give the full picture.
What is break-even ROAS?
Break-even ROAS is the minimum ROAS where your gross profit exactly covers your ad spend — leaving $0 profit. Formula: 1 ÷ (1 − COGS%). At 40% COGS, break-even is 1.67×. Any ROAS above this means your campaign is profitable on ad spend; below it means you're losing money even before accounting for overhead.
Why is my ROAS high but profit low?
High ROAS with low profit usually means your COGS is high relative to your price. At 70% COGS you need 3.33× ROAS just to break even — a 4× ROAS sounds strong but only generates $0.20 profit per $1 of ad spend. Use this calculator to see exact dollar profit, not just the multiple.
What is the difference between ROAS and ROI?
ROAS measures revenue return on ad spend: Revenue ÷ Ad Spend. ROI measures profit return on total investment: (Profit − Investment) ÷ Investment × 100%. ROAS only accounts for ad costs; ROI accounts for all costs. The "Margin on Ad Spend" metric in this calculator bridges the gap.
What COGS % should I use?
Use your gross COGS as a percentage of selling price — the direct cost of producing and delivering one unit: manufacturing, materials, shipping, and payment processing fees. Exclude marketing, salaries, and overhead. If you're unsure, your gross margin on financial statements equals 1 − COGS%.
How do I improve my ROAS?
Two levers: reduce ad spend while maintaining revenue (better targeting, creative, landing pages), or increase revenue while maintaining ad spend (higher average order value, better offers, improved conversion rate). The fastest short-term wins are usually landing page CRO and creative refresh to reduce audience fatigue.