ROAS calculator
Enter what you spent on ads and what those ads sold. Add your gross margin to see the ROAS you need to break even and what you kept.
Formula
ROAS = revenue from ads ÷ ad spend
A 4x ROAS means every $1 of ads brought in $4 of sales. Ad platforms sometimes show it as a percentage, so 4x and 400% mean the same thing.
New to the term? Read what ROAS means in the glossary.
How to calculate ROAS: a worked example
A skincare store spends $2,000 on Meta ads in a month, and Meta credits those ads with $7,000 of orders. The store's gross margin is 40%.
- ROAS = $7,000 ÷ $2,000 = 3.5x
- Gross profit = $7,000 × 40% = $2,800
- After the $2,000 ad bill, the store keeps $800
Break-even for this store is 1 ÷ 40% = 2.5x, so a 3.5x ROAS makes money.
What is a good ROAS?
A good ROAS is any ROAS above your break-even ROAS, and break-even depends only on your gross margin: break-even ROAS = 1 ÷ gross margin.
A store with 40% margins loses money below 2.5x, so a 3x ROAS is thin for that store and healthy for one with 70% margins. Compare your ROAS with your own break-even, not with another store's number. The table shows break-even for common margins.
| Gross margin | Break-even ROAS | At a 3x ROAS, each $1 of ads |
|---|---|---|
| 20% | 5.00x | loses $0.40 |
| 30% | 3.33x | loses $0.10 |
| 40% | 2.50x | keeps $0.20 |
| 50% | 2.00x | keeps $0.50 |
| 60% | 1.67x | keeps $0.80 |
| 70% | 1.43x | keeps $1.10 |
| 80% | 1.25x | keeps $1.40 |
Questions about ROAS
- What's the difference between ROAS and ROI?
- ROAS divides revenue by ad spend. ROI divides profit by everything you invested, so it counts product cost, shipping and fees. A campaign can show a 3x ROAS and still lose money if your gross margin is under 33%.
- How is ROAS different from MER?
- MER, the marketing efficiency ratio, divides all store revenue by all marketing spend. ROAS uses only the revenue an ad platform credits to its own ads. MER is harder to inflate; ROAS tells you which campaign to cut.
- Why does my ad platform show a different ROAS than Shopify?
- Each one credits sales by its own rules. Ad platforms count sales inside their attribution window, while Shopify uses its own attribution. Pick one source, keep using it, and compare trends rather than single days.
Do it with Replo
Get ROAS by campaign every morning
Replo reads your ad accounts and Shopify, then emails a ROAS report on the schedule you set.
Prompt: “email me ROAS by campaign every morning”