What is a good ROAS?
A good ROAS is any ROAS above your break-even point, and break-even ROAS is 1 divided by your gross margin. With a 40% margin you break even at 2.5x ($2.50 in sales per $1 of ads), so 4x is good; with a 20% margin you need 5x just to break even.
Why there's no single good number
ROAS only counts revenue. Whether that revenue is profit depends on how much of each sale you keep after product cost, payment fees, returns and fulfillment. Two stores with the same ROAS can have opposite results.
| Store | Gross margin | Break-even ROAS | Profit after ads |
|---|---|---|---|
| Store A: skincare | 70% | 1.43x | $11,000 |
| Store B: apparel | 45% | 2.22x | $3,500 |
| Store C: electronics | 25% | 4.00x | -$2,500 |
The same 3x is a strong result for store A, thin for store B and a loss for store C. That is why "a good ROAS is 4x" type rules of thumb mislead: they assume a margin that may not be yours.
Step 1: find your break-even ROAS
Break-even ROAS is the point where the gross profit from ad sales exactly pays for the ads.
Gross margin = (price - product cost - fees - fulfillment) / priceBreak-even ROAS = 1 / gross margin
A $60 product
Below 2x, every sale from ads loses money on the first order. Above it, the store keeps the difference.
Step 2: add the profit you want
A ROAS that only breaks even isn't the goal. Decide what share of revenue you want to keep after ad spend, and the target follows:
Target ROAS = 1 / (gross margin - profit share)
The $60 product with a 15% profit goal
$1,500 is 15% of $10,000, so the target does what it should.
Step 3: set it in Google Ads
Google defines target ROAS as the average conversion value you want for each dollar you spend, and shows it as a percent. Its own example is a store that wants $5 in sales for every $1 of ads, a 500% target ROAS.[1] Our $60 product would enter 286%.
- Make sure conversion values are real order values, not a fixed number per purchase.
- Start the target near what the campaign already achieves, then move it in small steps. A target far above current results usually cuts volume hard.
- Give brand, Shopping and prospecting campaigns their own targets. Brand searches are mostly people already looking for you, so their ROAS flatters the account.
When a lower ROAS is fine
First-order ROAS ignores repeat purchases. If customers reorder, you can afford to pay more for the first sale, as long as you know how long the payback takes and can fund it. Measure repeat rate from your own store data before you lower a target on that basis.
The reverse also holds. A very high ROAS on a small budget can mean you're only buying the cheapest, most certain sales. Raising the budget and accepting a ROAS closer to target often brings more total profit.
Run your own numbers in the ROAS calculator.
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Common questions
Is 4x a good ROAS?
It is profitable for any store with a gross margin above 25%, because break-even ROAS is 1 / margin and 1 / 0.25 = 4. At a 40% margin, 4x leaves 15% of revenue as profit after ad spend. At a 20% margin, 4x loses money.
What is a good ROAS for ecommerce?
There's no single number, because margins differ so much between products. Work out your break-even ROAS (1 / gross margin), add the profit you want, and use 1 / (margin - profit) as your target. That number is your good ROAS.
What is a good ROAS for Google Shopping or Performance Max?
The same rule applies to every campaign type: compare the campaign's ROAS to your break-even. Brand search usually shows a much higher ROAS than Shopping or prospecting because many of those buyers were already looking for you, so judge new-customer campaigns on their own target.
How do I set target ROAS in Google Ads?
Google asks for target ROAS as a percent: the conversion value you want per dollar of spend. Google's example is $5 of sales per $1 of spend, a 500% target. Start near what the campaign already delivers and change it in small steps so the bidding can adjust.
Can a ROAS below break-even ever make sense?
Yes, if customers come back. A first order below break-even can pay back over later orders. Decide how many months of payback you can fund, measure repeat rate from your own store data, and set a separate target for new-customer campaigns.
Sources
- About Target ROAS bidding, Google Ads Help. Checked Oct 30, 2026.Google's example: $5 of sales for each $1 of ad spend is a 500% target ROAS.
Every outside number on this page links to its source above, with the date we checked it. RunAds has not published its own account data here.
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